Figure 2-4
-Refer to Figure 2-4.Efficient production is represented by which point(s)?
A)Q,R,U
B)R,T,U
C)R,U
D)S,T

Question

Figure 2-4 
-Refer to Figure 2-4.Efficient production is represented by which point(s)?
A)Q,R,U 
B)R,T,U 
C)R,U 
D)S,T

Quizplus · Accepted Answer

The point where the isoquant curve (the curved line) is tangent to the highest possible isocost line (straight lines with different slopes) represents efficient production. In this case, it is the point where the curved line (isoquant) touches isocost line R. Therefore, options A and B can be eliminated as they include points Q and T, which are not tangent to the highest possible isocost line. Option D includes points S and T, which are not tangent to the highest possible isocost line. Thus, the answer is C, which includes point R and point U, which are both tangent to the highest possible isocost line.

Figure 2-4 -Refer to Figure 2-4.Efficient Production Is Represented by Which Point(s)