Refer to the Graphs

question 60

Multiple Choice

Refer to the graphs. Growth of production capacity is shown by

• A) the shift from AB to CD only.
• B) the shift from X to Y only.
• C) both the shift from AB to CD and the shift from X to Y.
• D) both the shift from AB to CD and the shift from Y to X.

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Definitions:

Economic Efficiency

A situation in which resources are optimally allocated to serve each individual or entity in the best way while minimizing waste and inefficiency.

Market

A system or an environment where buyers and sellers interact to trade goods, services, or financial instruments.

Free-rider Problem

A situation where individuals consume goods or services without paying for them, which typically occurs with non-excludable and non-rival public goods.

Market Resources

The assets, materials, and inputs used to produce goods and services and are made available through the market.