Asked by Hudson Nyaki on Jul 09, 2024
Verified
Suppose that a fully employed economy produces only two goods,hamburgers and flat-panel TVs.If the economy is currently producing more than the optimal quantity of hamburgers,then to attain the optimal allocation of resources it should:
A) produce more hamburgers and fewer TVs.
B) produce more TVs and fewer hamburgers.
C) produce more of both goods.
D) produce fewer of both goods.
Optimal Quantity
The amount of a good or service that achieves the best balance between benefits and costs, maximizing net benefits to the consumer or producer.
Optimal Allocation
Optimal allocation refers to the most efficient distribution of resources and goods in an economy, maximizing the total benefit or utility gained.
Hamburgers
A popular food item consisting of cooked ground meat, usually beef, placed inside a split bun, often served with various toppings and condiments.
- Learn about the principles of marginal benefits and marginal costs, including their influence in deciding the ideal production output and the allocation of resources.
Verified Answer
JS
Jerick SarcenoJul 15, 2024
Final Answer :
B
Explanation :
If the economy is currently producing more than the optimal quantity of hamburgers, it is producing hamburgers beyond the point where the marginal benefit is equal to the marginal cost. To attain the optimal allocation of resources, the economy should produce fewer hamburgers and allocate those resources to the production of flat-panel TVs, which are currently being produced below the optimal quantity. This will allow the economy to produce more flat-panel TVs at a lower opportunity cost than if it were producing hamburgers beyond the optimal point. Thus, producing more TVs and fewer hamburgers will help the economy achieve the optimal allocation of resources.
Learning Objectives
- Learn about the principles of marginal benefits and marginal costs, including their influence in deciding the ideal production output and the allocation of resources.