Multiple Choice Question Goods and services are produced efficiently when production is organized in combinations and ways. Othat averages the cost per unit of output Othat minimize the cost per unit of output O where the costs per unit of output are equal to the capital investment Need help? Review these concept resources. Read About the Concept Rate your confidence to submit your answer. digh LOV
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Step 1: The most efficient production occurs when the cost per unit of output is minimized. Show more…
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1. A firm sells a product in a purely competitive market. The marginal cost of the product at the current output of 200 units is $6.00. The minimum possible average variable cost is $8. The market price of the product is $7.00. To maximize profit or minimize losses, the firm should: Group of answer choices produce less than 200 units shutdown produce more than 200 units continue to produce 200 units 2. Alternate Text: A graph showing three U-shaped cost curves: MC, AVC, and ATC. MC is at the minimum of $2, AVC is at the minimum of $5, and ATC is at the minimum of $7. Based on the graph, the longrun equilibrium price is equal to _____________________ Group of answer choices $2 $5 $7 $10 3. What is the lowest allowable profit a firm can have in the long-run pure competition? Group of answer choices Equal to total cost $0 Equal to variable cost Equal to fixed cost 4. Alternate Text: A graph showing three U-shaped cost curves: MC, AVC, and ATC. MC is at the minimum of $1.50 when the output is 3000 units. AVC is at the minimum of $4 when the output is 5500 units. ATC is at the minimum of $5.50 when the output is 6000 units. Group of answer choices 6000 units 5000 units 3000 units 5500 units 5. Which of the following condition guarantees allocative efficiency? Group of answer choices Price = minimum average variable cost Price = marginal cost Price = minimum average total cost Price = marginal revenue
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Exhibit 2-3 Production possibilities curve data Capital goods 0 10 20 30 40 Consumer goods 200 180 140 80 0 20. According to the data given in Exhibit 2-3, the production of 140 units of consumer goods and 10 units of capital goods: is possible but would be inefficient. may be a result of unemployment. may be a result of unused natural resources. all of the above. none of the above. 21. All points on the production possibilities curve are: A) unattainable. B) fair. C) efficient. D) optimal.
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Suppose the productivity of capital and labor are as shown in the table bclow. The output of these resources scils in a purely competitive market for $\$ 1$ per unit. Both capital and labor are hired under purely competitive conditions at \$3 and SI, respectively. a. What is the least-cost combination of labor and capital the firm should employ in producing 80 units of output? Fxplain. b. What is the profit-maximizing combination of labor and capital the firm should use? Explain. What is the resulting level of output? What is the cconomic profit? Is this the least costly way of producing the profitmaximizing output?
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