Which of the following is an example of productive inefficiency?
a. Scientists discover a new substance that dramatically increases potential steel production.
b. A demographic boom leads to a rise in the number of workers in the labor force.
c. The rate of unemployment falls to zero.
d. Computer technicians are forced to answer telephones rather than perform their normal duties.
e. Due to economic growth, the economy reaches a new point along its production possibilities frontier.
D
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In the short run, each perfectly competitive firm is free to
a. increase its plant size. b. increase its volume of output up to its maximum existing capacity. c. charge a price above the market price. d. do all of these.
When there are diseconomies of scale in production: a. long-run average total cost declines as output expands. b. long-run average total cost increases as output expands. c. marginal cost decreases as output expands
d. none of the above
When stock prices are falling, financing capital expenditures with stock sales is ______.
a. less expensive b. more expensive c. illegal d. most efficient
The degree to which the public believes the central bank's announcements about future policy is its
A. reputation. B. credibility. C. openness. D. transparency.