In order to satisfy as many wants as possible, it is necessary to achieve PRODUC
ID: 1150357 • Letter: I
Question
In order to satisfy as many wants as possible, it is necessary to achieve PRODUCTIVE efficiency
since otherwise output may go to where it is less valued.
The musician was known for multiple encore performances, but had limited stamina and a rational mind. Even she would eventually call it a night when, by her judgement
the additional enjoyment of one more encore (the marginal benefit) is rising.
a. since otherwise resources are idle. b. since it would be impossible to produce more of one thing without producing less of another. c.since otherwise output may go to where it is less valued.
Explanation / Answer
1) Solution: since it would be impossible to produce of one thing without producing less of another
Explanation: Production efficiency is achieved when it is impossible for the production of more of one good without producing less of certain other good
2) Solution: the marginal cost is greater than the marginal benefit of an additional encore
Explanation: There is inefficient underproduction when marginal cost exceeds marginal gain
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