The Most Efficient Combination of Resources in Producing a Given

question 23

Multiple Choice

The most efficient combination of resources in producing a given output is the combination that

• A)comes closest to using the same quantities of land, labor, capital, and entrepreneurial ability.
• B)minimizes the cost per unit of output.
• C)uses the smallest total quantity of all resources.
• D)conserves most on the use of labor.

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Definitions:

Federal Trade Commission

A federal agency established to protect consumers and promote competition by preventing anticompetitive, deceptive, and unfair business practices.

Price-Fixing

An illegal agreement among competitors to set prices at a certain level, rather than letting them be determined naturally by supply and demand.

Economic Efficiency

A state in which resources are allocated in a way that maximizes the production of goods and services at the lowest cost, while achieving the highest possible welfare or utility.

Negative Externalities

Costs experienced by third parties due to the actions of others that are not reflected in market prices.