Figure 2-4 Figure 2-4 Shows Various Points on Three Different Production Possibilities

question 186

Multiple Choice

Figure 2-4

Figure 2-4 shows various points on three different production possibilities frontiers for a nation.
-Refer to Figure 2-4.Consider the following events:
A.an increase in the patent protection period to 30 years
B.an increase of a nation's capital stock
C.an improved property rights system
Which of the events listed above could cause a movement from V to W?

• A)a only
• B)a and b only
• C)a and c only
• D)b and c only
• E)a, b, and c

---

Definitions:

Production Isoquant

A curve that represents all combinations of inputs that produce the same level of output, used in the analysis of production technology.

Marginal Products

The additional output that is produced by using one more unit of a particular input, holding other inputs constant, critical in the analysis of production efficiency.

Profitability

A measure of the efficiency with which a company or a business utilizes its resources to generate profits.

Production Set

A set of all possible combinations of inputs and outputs that a firm can produce taking into account its technology.