When There Is an Improvement in Technology,holding All Else Constant

question 65

Multiple Choice

When there is an improvement in technology,holding all else constant,

• A) the production possibilities frontier will shift inward
• B) society faces larger opportunity costs from shifting productive resources from one use to another
• C) goods and services will increase in price
• D) the economy must have some idle resources
• E) the production possibilities frontier will shift outward

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Definitions:

Pharmaceutical Companies

Businesses involved in the research, development, production, and marketing of drugs and medications.

Socially Optimal

A state of resource allocation where social welfare, typically measured in terms of efficiency and equity, is maximized.

Marginal Cost

The increase in total cost that arises from producing one additional unit of output.

Efficient Level

The point at which the optimal quantity of a good or service is produced, maximizing the potential benefit and minimizing waste.