A Basic Model of a Business Firm in Economics Assumes

question 1

Multiple Choice

A basic model of a business firm in economics assumes that its management cannot improve on the technology that transforms inputs like labor and energy into output.This assumption helps them to understand the choice of:

• A)input levels that minimize cost.
• B)output levels that minimize cost.
• C)output levels that maximize profits.
• D)input levels that maximize profits.

---

Definitions:

Marginal Social Benefit

The additional benefit to society from consuming or producing one more unit of a good or service.

Marginal Social Cost

The extra expense borne by the entire society resulting from the manufacture of an additional unit of a product or service.

Trade Permits

Legal documents or licenses required to engage in certain types of trade or business, often used to regulate or protect industries.

Pollution Reduction

Pollution reduction refers to strategies and activities aimed at decreasing the amount of pollutants released into the environment.