Any Point Inside a Production Possibilities Curve Indicates

question 75

Multiple Choice

Any point inside a production possibilities curve indicates:

• A) unemployment and/or inefficiency.
• B) that the law of increasing opportunity costs is no longer valid.
• C) that society doesn't want more of either good.
• D) that economic growth is no longer possible.

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Definitions:

Average Total Cost

The total cost of production divided by the quantity of output produced, including both fixed and variable costs.

Fixed Costs

Costs that do not change with the level of output produced, such as rent, salaries, and loan payments.

Marginal Cost

The monetary outlay for producing an additional unit of a good or service.

Fixed Costs

Expenses that do not change in the short term regardless of the level of production or sales, such as rent and salaries.