if an economy is operating inside the production possibilit A) the economy is op
ID: 1109509 • Letter: I
Question
if an economy is operating inside the production possibilit A) the economy is operating at full roduction. B) the economy can only produce more of one good by giving up more of anothert C) the economy is operating efficiently D) the economy is operating inefficiently conclude that 17) Points outside the prodtuction possibilities frontier are A) unattainable. C) as obtainable as points inside the frontier. B) efficient D) feasible 18) The circular flow of economic activity shows how sinesses not only sell goods and services to households, but also buy resources from households B) wh at seems like innovation in the design of economic policy is usually just a repeat of similar policies used many years ago. C) what goes around comes around. D) all output is either recycled or becomes environmental waste. 19) A cost that does not vary with the level of output in the short run but may vary in the long run is D) total cost. A) sunk cost. B) fixed cost. C) variable cost. SHORT ANSWER. Write th e word or phrase that best completes each statement or answers the question. equals 20) The rule for profit maximization for a monopolist is to produce to the point at which 21) Identify the three basic questions that all economies must answer. Explain the choices that are made in each case. 22) 23) An increase in demand occurs when demand shifts to the studies the individual parts of the economy. TRUE/FALSE. Write T if the statement is true and 'F if the statement is false. 24) I the price of a good increases and total revenue incrases, then demand is inelastic. 25) If market price falls below the minimum point on its average variable cost, a firm will shutdown.Explanation / Answer
Ans)
16)
D) the economy is producing inefficiently.
This is becausse it is not using all of its resourves.
17)
a) unattaiable
This is because there not sufficient resourves to produce it.
18)
A0 businesses not oly sell goods and service to households but also buy resourves from households .
19)
B) fixed costs
All costs are variable in the long run
20)
MC=MR
Profit maximization rule MC= MR
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