Figure 2.1 -The Production Possibilities Curve in Figure 2.1 Illustrates the Notion

question 79

Multiple Choice

Figure 2.1

-The production possibilities curve in Figure 2.1 illustrates the notion of

• A) increased factory goods production.
• B) increased farm produce production.
• C) diminishing resources.
• D) opportunity cost.

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Definitions:

Purely Competitive Producer

A producer in a market structure characterized by many small firms, homogeneous products, and free entry and exit, leading to zero economic profit in the long run.

Economic Profit

The differential amount left after subtracting all types of costs, both seen and unseen, from the total income.

Maximize Profit

The process or strategy of adjusting production and operation to achieve the highest possible return or profit.

Minimize Losses

Refers to the strategy of reducing the amount of money or resources wasted or not profitably used in a business or operation.