Assume That, Given Factors of Production and Existing Knowledge and Technology

question 91

Multiple Choice

Assume that, given factors of production and existing knowledge and technology, it is not possible to produce more of one good without foregoing the opportunity to produce some of another good. Economists would characterize this situation as:

• A)​inefficient.
• B)​efficient.
• C)​due to unemployment.
• D)​a point outside the production possibilities frontier.

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Definitions:

Variable Costs

Costs that change in proportion to the activity or volume of business, such as materials and labor.

Total Costs

The complete cost of production of goods or services, which includes both fixed and variable costs.

Revenues

The total income generated by a company from its business activities, typically from the sale of goods and services before any expenses are deducted.

Total Variable Cost

The total variable cost is the sum of all variable expenses that change in proportion to the volume of output or production.