Which of the Following Is a Necessary Condition for an Economy's

question 41

Multiple Choice

Which of the following is a necessary condition for an economy's product- mix to be efficient?

• A)Producers have identical marginal rates of transformation.
• B)Marginal rates of substitution and transformation differ.
• C)Consumers have identical marginal rates of substitution.
• D)Marginal products are identical.

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Definitions:

Adjusting Entry

A journal entry made at the end of an accounting period to record any unrecorded income or expenses for that period.

Interest Payable

A liability account showing the amount of interest expense that has accrued but not yet been paid to creditors.

Effective Interest Rate

The actual rate of interest earned or paid on an investment or loan, accounting for the effect of compounding.

Discounted Interest

The process of reducing the interest rate on a loan, calculated in advance and deducted from the principal amount at the time of lending.