Figure 2-5 -Refer to Figure 2-5.This Economy Cannot Currently Produce 70 Washers

question 6

Multiple Choice

Figure 2-5
-Refer to Figure 2-5.This economy cannot currently produce 70 washers and 70 dryers because

• A)it is not using all of its resources.
• B)it is not using the most efficient production process.
• C)it does not have the resources and technology to produce that level of output.
• D)All of the above are correct.

---

Definitions:

Short-run Supply Curve

Represents the relationship between price and quantity supplied over a short period, assuming some inputs are fixed.

Marginal Cost Curve

A graphical representation showing how the cost to produce one additional unit of output changes as production increases.

Shut Down

A short-term decision by a firm to cease operations because operating costs exceed revenue, usually considered in the context of price being less than variable costs.

Total Fixed Costs

A company's expenses that do not change with the level of production or services, such as rent, salaries, and insurance premiums.