Which of the Following Is Not True for Economic Production

question 130

Multiple Choice

Which of the following is not true for Economic Production Quantity model?

• A)Usage rate is constant.
• B)Production rate exceeds usage rate.
• C)Run size exceeds maximum inventory.
• D)There are no ordering or setup costs.
• E)Average inventory is one-half maximum inventory.

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Definitions:

Scarcity

The fundamental economic problem of having seemingly unlimited human wants in a world of limited resources, leading to the necessity of making choices.

Production Possibilities Curve

A graph that depicts the maximum possible output combinations of two goods that can be produced with available resources and technology, illustrating opportunity costs.

Production Possibilities Curve

A graphical representation that shows the maximum quantity of one good that can be produced for each possible quantity of another good produced, assuming all resources are fully and efficiently utilized.

Economy's Resources

The total assets available for the production of goods and services within an economy, including natural resources, labor, capital, and technology.