--%>
Assignment Help - homework help

Society decide its optimal point on the production

How does society decide its optimal point on the production possibilities curve?

E

Expert

Verified

1. Recall that society receives marginal benefits from each additional product consumed, and as long as this marginal benefit is more than the additional cost of the product, it is advantageous to have the additional product.

2. Conversely, if the additional (marginal) cost of obtaining an additional product is more than the additional benefit received, then it is not “worth” it to society to produce the extra unit.

3. Marginal benefits decline as society consumes more and more pizzas.

a. Beyond that, the added benefits would be less than the added cost.

b. At less than 200,000, the added benefits will exceed the added costs, so it makes sense to produce more.

4. Generalization:  The optimal production of any item is where its marginal benefit is equal to its marginal cost.  As an eg: this ought to come about at 7,000 robots for robots.

   Related Questions in Business Economics

  • Q : Independent queue vs. pooled queue

    Instruction: McDonald's vs. Burger King - these two fast food chains use different waiting line design: Independent queue vs. pooled queue. To compare the two different queue systems on equal footing, let's assume that we pick a McDonald's sto

    		•
  • Q : Absolute advantage in international

    One early involvement of Adam Smith to the theory of gains by international trade, although later thoroughly revised and refined through David Ricardo, was the conception of: (1) mercantilism. (2) absolute advantage. (3) comparative a

    		•
  • Q : Example of self interest to define

    The concept of _____ was demonstrated by _____ along with the quotation, “The defeat of a bit finger would remain the average European from sleeping which night,... but, given he never saw them, he will snore along with the most profound security over the loss o

    		•
  • Q : Answer the following questions based on

    The dataset used in this question contains data on 180 economics journals for the year 2000. The variable descriptions are as follows: logoclc - log of the number of library subscription loglibcit - log of the library subscription price per citation.

  • Q : Facts serve to sort out good and bad

    Explain the statement: “Facts serve to sort out good and bad hypotheses.”?

    		•
  • Q : Generalization and abstraction are

    Explain the statement: “Generalization and abstraction are nearly synonymous.”?

    		•
  • Q : Way to determine nature price of Adam

    “Natural price” by Adam Smith of a good was eventually determined through: (1) the amount of capital used within production in the short run. (2) long-run average costs of production, that Adam Smith believed to be the amo

    		•
  • Q : Economic efficiency enhancement as

    Transaction costs are decreased and economic efficiency is enhanced by: (1) long-term wage and price controls. (2) monopolies which cooperate with central planners. (3) blacklists and yellow dog contracts. (4) bureaucratic tendencies

    		•
  • Q : Importance of Economics Importance of

    Importance of Economics:Economics has become one of the major branches of social sciences. This is of enormous practical value in our day by day life. In pure sciences, we study the subject

    		•
  • Q : Describe the output effects of Inflation

    Describe the output effects of Inflation?

    		•