-Refer to the Above Figure

question 255

Multiple Choice

-Refer to the above figure. Assume that only two goods can be produced in the economy. Which of the following statements is TRUE?

• A)Points a, b, and c are all obtainable points of production.
• B)Points a and b are obtainable points of production.
• C)Points b and c are obtainable points of production.
• D)Only point b is an obtainable and efficient point of production.

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Definitions:

Marginal Product

The additional output that is produced by employing one more unit of a factor of production, keeping all other inputs constant.

Fourth Worker

In the context of diminishing returns, it could refer to a point where adding an additional worker leads to a lesser increase in output.

Marginal Productivity

The extra output that a business gains by adding one more unit of input, such as labor or capital.

Income Distribution

The way in which a country’s total GDP is spread amongst its population, affecting economic equity and quality of life.