Figure 13-12 
-Refer to Figure 13-12 to answer the following questions.
a.What is the productively efficient output?
b.What is the allocatively efficient output?
c.What is the amount of excess capacity?
d.Suppose the firm is currently producing 14 units.What happens if it increases output to 17 units?
Definitions:
Investment
The allocation of resources, usually money, in the expectation of generating an income or profit.
Compounded Semiannually
Interest that is computed and appended to the original amount semi-annually.
Effective Rate
The actual interest rate that an individual earns or pays on an investment, loan, or other financial product, after compounding and other factors are taken into account.
Car Loan
A financial loan specifically used to purchase a car, typically secured by the car itself as collateral.
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