Which of the following statements best describes productive efficiency?
a. Productive efficiency occurs when as additional increments of resources are added to produce a good or service, the marginal benefit from those additional increments decline.
b. Productive efficiency occurs when it is impossible to produce more of one good (or service) without decreasing the quantity produced of another good (or service).
c. Productive efficiency occurs when a country can produce a good at a lower cost in terms of other goods or when a country has a lower opportunity cost of production.
d. Productive efficiency occurs when the mix of goods being produced represents the mix that society most desires.
b. Productive efficiency occurs when it is impossible to produce more of one good (or service) without decreasing the quantity
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The purpose of expansionary monetary policy is to increase ________.
A. real GDP B. the GDP gap C. interest rates D. the inflation rate
In a macroeconomic model designed to explain why some countries grow faster than others, which of these variables is likely to be endogenous?
A) investment B) economic policies C) geographic size D) population E) none of the above
GDP excludes most items that are produced and sold illegally and most items that are produced and consumed at home because
a. the quality of these items is not high enough to contribute value to GDP. b. measuring them is so difficult. c. the government wants to discourage the production and consumption of these items. d. these items are not reported on income tax forms.
In terms of the world as a whole, imports must equal exports because
A. Every good exported by one country becomes an import for another country. B. The United Nations requires it. C. Most countries, other than the United States, have a balanced trade situation. D. It is part of international law.