An Inefficient Use of Resources Can Be Illustrated Using a Production

question 137

Multiple Choice

An inefficient use of resources can be illustrated using a production possibilities curve as:

• A)​a movement to the northeast along the curve.
• B)​a movement to the southeast along the curve.
• C)​a movement off the curve in a northeast direction.
• D)​a movement off the curve in a southwest direction.

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Definitions:

Marginal Revenue

The additional income earned from selling one more unit of a good or service.

Competitive Price-Taker

A market participant who accepts the prevailing market prices as given because they have no power to influence those prices due to intense competition.

Marginal Cost

The increase in total cost that arises from producing one additional unit of a product or service.

Profit Maximized

The point at which a firm achieves the highest profit possible, considering the level of output and cost of production.