Total Factor Productivity (TFP)is the Ratio of the Quantity of Output

question 114

True/False

Total factor productivity (TFP)is the ratio of the quantity of output produced to the costs of all inputs used, where the inputs are combined on the basis of current period prices.

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Definitions:

Optimal Tax Rate

The tax rate that efficiently balances revenue generation for government purposes with minimal economic distortion or disincentive for economic activity.

Marginal Social Benefit

The increased value to society resulting from the consumption or production of one more unit of a good or service.

External Benefit

A benefit that affects people other than the direct consumers or producers of a good or service, often leading to positive spillover effects.

Negative Externality

A situation where a third party suffers from a transaction or activity they are not directly involved in, often leading to market failure if not corrected by government intervention.