Asked by Christyon Pulley on Jun 08, 2024
Verified
The point on the production possibilities curve that is most desirable can be found by:
A) estimating the marginal costs of both products in real or physical terms.
B) comparing marginal benefits and marginal costs.
C) determining where least-cost production occurs.
D) calculating where economic growth will be greatest.
Production Possibilities Curve
A graph that shows the maximum number of possible units a company can produce if it only produces two types of goods given a fixed amount of resources.
Marginal Costs
The extra financial burden of manufacturing another unit of a product or service.
Marginal Benefits
The improvement in benefit or utility realized by consuming or producing one more unit of a good or service.
- Absorb the fundamentals of marginal benefits and marginal costs, as well as their importance in establishing the optimum output and resource allocation.
- Master the theory behind the perfect allocation of resources and how this is realized.
Verified Answer
PO
Paraic O CarrollJun 11, 2024
Final Answer :
B
Explanation :
The most desirable point on the production possibilities curve can be found by comparing the marginal benefits and marginal costs of both products. This is because the point where the marginal benefit of producing one more unit of a good is equal to its marginal cost is the point where society is getting the most value from its resources. Therefore, choice B is the best option.
Learning Objectives
- Absorb the fundamentals of marginal benefits and marginal costs, as well as their importance in establishing the optimum output and resource allocation.
- Master the theory behind the perfect allocation of resources and how this is realized.