The General Rule for Allocating a Productive Resource Efficiently Across

question 45

Multiple Choice

The general rule for allocating a productive resource efficiently across different production activities of the same product, like fishing boats in the text case example, is to choose the allocation for which the

• A)average product of the resource is the same in every activity.
• B)marginal product of the resource is the same in every activity.
• C)total product of the resource is the same in every activity.
• D)average product is equal to the marginal product in every activity.

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Definitions:

Investment

The allocation of resources or capital to create profit in the future.

Treasury Bond

Long-term, interest-bearing securities issued by the U.S. government as a means of borrowing money to fund government spending.

Corporate Stock

Represents ownership shares in a corporation, allowing shareholders to claim a portion of the company's profits.

Expected Rate

The projected or anticipated rate of return on an investment over a specific period.