-If This Firm Produced at Its Most Efficient Output Level

question 36

Multiple Choice

-If this firm produced at its most efficient output level it would produce about _______ units.

• A)40
• B)50
• C)60
• D)70

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Definitions:

MPC

MPC, or Marginal Propensity to Consume, is the proportion of additional income that an individual spends on consumption.

APC

Average Propensity to Consume, the fraction of income that households spend on consumption as opposed to saving.

MPS

An acronym that can stand for multiple financial and economic terms, such as Marginal Propensity to Save, which indicates the fraction of additional income that a household saves.

45-Degree Line

In economics, a line on a graph that shows where the value of the goods and services produced in an economy equals the total income earned in that same economy.