If a Firm Is Operating at the Point of Tangency

question 51

Multiple Choice

If a firm is operating at the point of tangency between an isoquant and an isocost line, its production is:

• A) technically efficient but economically inefficient.
• B) technically inefficient but economically efficient.
• C) both technically and economically efficient.
• D) both technically and economically inefficient.

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Definitions:

Gross Investment

The total expenditure on new capital assets (plant, equipment, buildings) before accounting for depreciation.

Net Export

The value of a country's total exports minus its total imports, representing the balance of trade.

Private Consumption

Expenditure by households on goods and services, excluding purchases of residences.

Government Spending

Expenses incurred by the government to provide goods and services, invest in public projects, and support economic stability and growth.