On a Graph of a Production Possibilities Curve, an Inefficient

question 96

Multiple Choice

On a graph of a production possibilities curve, an inefficient point is:

• A)necessarily an attainable point.
• B)not necessarily an attainable point.
• C)necessarily an unattainable point.
• D)possibly an unattainable point.

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Definitions:

Producer Surplus

The divergence between what producers expect to get for a good or service and the actual compensation they receive.

Deadweight Loss

The loss of economic efficiency when the equilibrium outcome is not achievable or not achieved in a market.

Perfectly Inelastic

A market condition where the quantity demanded or supplied does not change in response to price changes.

Deadweight Loss

An economic inefficiency that occurs when the total welfare in a market is not maximized, resulting from distortions such as taxes, subsidies, or monopolies.