Use the Following to Answer Question(s): Production Possibilities in Alphaland

question 41

Multiple Choice

Use the following to answer question(s) : Production Possibilities in Alphaland and Omegaland

-(Exhibit: Production Possibilities in Alphaland and Omegaland) At point A in Alphaland, ________ additional computer(s) cost(s) _______ additional car(s) and at point A? in Omegaland, _______ additional computer(s) cost(s) _______ car(s) .

• A) 1; 5; 1; 1/2
• B) 1; 1/2; 1; 5
• C) 5; 1; 1/2; 1
• D) 1/2; 1; 5; 1

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Definitions:

LRAC Curve

Stands for Long-Run Average Cost curve, which shows the lowest average cost of producing different levels of output when all inputs, including capital, are variable.

Entry

The act of beginning or entering into a particular sphere or market, often used in the context of firms entering an industry.

MC of Production

The additional cost incurred by producing one more unit of a good or service, often denoted as marginal cost.

Long-Run Industry

An economic concept where all inputs and operations are adjustable, allowing for new firms to enter or exit the market, affecting supply and price levels.