The Idea That the More Any Given Resource Is Applied

question 15

Multiple Choice

The idea that the more any given resource is applied to production, the lower the marginal gain in output, until a point is reached where the additional inputs produce no additional output, is referred to as:

• A) the point of no return.
• B) the law of diminishing returns.
• C) supply and demand.
• D) inelasticity.
• E) virtual economics.

---

Definitions:

Efficient Level

Refers to the state where resources are allocated in a way that maximizes the net benefit to society, often achieved when marginal cost equals marginal benefit.

Competitive Output

The level of production that firms in a perfectly competitive market produce and sell at the market price, where marginal cost equals marginal revenue.

Competitive Price

A pricing strategy where the price of a product or service is set based on the prices charged by competitors.

Tax

A compulsory financial charge or levy imposed by a government on individuals or businesses to fund public expenditures.