It Is Efficient to Produce an Additional Shirt If the

question 90

Multiple Choice

It is efficient to produce an additional shirt if the

• A) marginal social benefit of producing the shirt is greater than zero.
• B) marginal social benefit of producing the shirt is zero.
• C) marginal social benefit of producing the shirt is greater than the marginal social cost of producing it.
• D) total social benefit from producing shirts is maximized.

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Definitions:

Initial Investment

The amount of money used to start a project, investment, or venture.

Depreciation

The reduction in value of an asset over time, often due to wear and tear or obsolescence.

Accounting Break-Even

The point at which an organization's revenues exactly cover its expenses, excluding interest and taxes, resulting in neither profit nor loss.

Straight-Line Depreciation

This method of depreciation spreads the cost evenly across the useful life of a fixed asset, resulting in consistent annual charges.