The Economically Efficient Method of Production

question 8

Multiple Choice

The economically efficient method of production:

• A) is the same in all countries.
• B) is not influenced by the relative scarcity of inputs.
• C) is influenced by the relative scarcity of inputs.
• D) does not depend on input prices.

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Definitions:

Maximum

The highest or greatest possible amount or degree of something.

Long-Run Equilibrium

A state in which all factors of production and inputs in a market are fully adjusted to any economic changes, showing no tendency for further adjustment.

Competitive Price-Searcher Market

A market in which the firms have a downward-sloping demand curve, and entry into and exit from the market are relatively easy.

Positive Economic Profit

Earnings that exceed both the explicit and implicit costs of a company, indicating a financial gain beyond the normal expectations of profit.