Using Figure 1

question 14

Multiple Choice

Using Figure 1.6,if an economy has the capacity to produce represented by PP1,then point E represents

• A)A combination of cars and SUVs that is not attainable.
• B)A constant trade-off between cars and SUVs.
• C)A change in technology.
• D)An efficient use of resources.

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Definitions:

Profit-Maximizing Level

The point at which a company can achieve the highest profit by adjusting production levels, where marginal revenue equals marginal cost.

Total Output

The total quantity of goods or services produced by an economy, firm, or manufacturing process within a specific time period.

Units

Basic quantitative measures used in economics and commerce to count, describe, and measure the amount of a product or commodity.

Least-Cost Combination

is an economic principle that firms achieve by using the mix of inputs that minimize their costs while producing a given level of output.