-Refer to the Production Possibility Graph Above

question 22

Multiple Choice

-Refer to the production possibility graph above.Assume that the economy is in equilibrium at point e.If a war reduces the country's capital stock by 40%,the new equilibrium is most likely to be

• A) point b.
• B) point h.
• C) point f.
• D) point d.
• E) point e.

---

Definitions:

Average Total Cost

The total cost of production divided by the quantity produced, representing the per unit cost of goods or services.

Output

The amount of products or services generated by a company, sector, or economic system within a specific timeframe.

Marginal Cost

The expense incurred from manufacturing an extra unit of a product or service.

Average Total Cost

A rephrased definition: The per unit production cost calculated by dividing the sum of all production costs by the quantity of output produced.