If an Economy Is Producing Inefficiently, It Is

question 13

Multiple Choice

If an economy is producing inefficiently, it is

• A)possible to increase production of all goods simultaneously.
• B)possible to increase production of one good at the expense of another.
• C)not possible to increase production of any good.
• D)not possible to increase economic growth.
• E)possible to increase production with no effort.

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Definitions:

Fixed Costs

Costs that do not vary with the level of production or sales, such as rent, salaries, and insurance.

Direct Labor Rate

The cost per labor-hour of the workers directly involved in the manufacturing or production process.

Fringe Benefits

Fringe benefits are additional compensation provided to employees beyond their normal wages, including health insurance, retirement plans, and paid time off.

Contribution Margin

Represents the amount of revenue remaining after deducting variable costs, contributing towards covering fixed costs and generating profit.