A Binding Less Than or Equal to (≤) Constraint in a Maximization

question 62

Multiple Choice

A binding less than or equal to (≤) constraint in a maximization problem means

• A) that all of the resource represented by the constraint is consumed in the solution.
• B) it is not a constraint that the level curve contacts.
• C) another constraint is limiting the solution.
• D) the requirement for the constraint has been exceeded.

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Definitions:

Average Product

The output per unit of input, such as the quantity of goods produced per worker, used to measure productivity.

Marginal Product

The additional output that can be produced by adding one more unit of a specific input, whilst holding other inputs constant.

Total Product

The total output of goods or services produced by a firm during a given period of time.

Diminishing Marginal Returns

A principle stating that as more of a production input is added, holding all others constant, the resulting additional output will eventually decrease.