If an Economy Is Producing at a Point Inside Its

question 343

Multiple Choice

If an economy is producing at a point inside its production possibilities frontier

• A) it is possible to produce more of one good without giving up some of the other good.
• B) it is producing efficiently.
• C) it is producing beyond its production possibilities.
• D) full employment is achieved.

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Definitions:

Factor of Production

Resources used in the creation of goods and services, which include land, labor, capital, and entrepreneurship.

Total Income

The full amount of income received by an individual or a country, including wages, salaries, benefits, and income from investments before any deductions.

Marginal Product

Marginal product is the addition to total output produced by using one more unit of a specific input, holding all other inputs constant.

Marginal Revenue

The change in total revenue generated by an additional unit of output.