The Production Possibilities Curve Represents the Maximum Feasible Production Combinations

question 343

Multiple Choice

The production possibilities curve represents the maximum feasible production combinations resulting from

• A) the mix of current resources that utilizes all available inputs using current technology.
• B) a fixed amount of demand by consumers.
• C) the lack of trade-offs in production.
• D) the lack of technology used in production.

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Definitions:

Marginal Revenue

The extra revenue obtained through the sale of an additional unit of a product or service.

Producing Unit

A division or component of a business that is responsible for the creation of specific products or services.

Marginal Cost

The additional cost incurred by producing one more unit of a product or service.

Producing Unit

A part of a company or a machine that is responsible for manufacturing or creating goods.