The Attainable Production Points on a Production Possibility Curve Are

question 16

Multiple Choice

The attainable production points on a production possibility curve are:

• A)the horizontal and vertical intercepts.
• B)the points along the production possibility frontier.
• C)the points outside the area enclosed by the production possibility frontier.
• D)the points along and inside the production possibility frontier.

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Definitions:

Marginal Cost

The incremental cost associated with producing an extra unit of a product or service.

Average Total Cost

The total cost of production divided by the number of units produced, representing the cost per unit of output.

Average Variable Cost

The total variable cost divided by the number of units produced, representing the variable cost per unit of output.

Average Fixed Cost Curve

A graphical representation showing how average fixed costs (costs that do not change with the level of output) decreases as production increases.