To Determine How Much of a Good to Produce to Achieve

question 342

Multiple Choice

To determine how much of a good to produce to achieve allocative efficiency,we

• A) construct a production possibilities frontier and choose the midpoint.
• B) construct a production possibilities frontier and choose any point on it.
• C) must produce on the PPF and at the point where the marginal benefit and marginal cost of the good are equal.
• D) must produce on the PPF and at the point where the marginal benefit exceeds by any amount the marginal cost of the good.
• E) must produce on the PPF and at the point where the marginal benefit exceeds by as much as possible the marginal cost of the good.

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Definitions:

Overseas Markets

Foreign sectors where goods, services, and investments cross national borders for trade.

Multidomestic Corporations

Companies that operate in multiple countries, adapting their products and practices to each local market.

Independent Companies

Businesses that operate on their own, without being controlled by or affiliated with a larger conglomerate or parent company.

Expatriates

Individuals who live and work outside their native country, often for a specified period and for professional reasons.