The general rule for allocating a productive resource efficiently across different production activities of the same product, like fishing boats in the text case example, is to choose the allocation for which the
A)Average product of the resource is the same in every activity
B)Marginal product of the resource is the same in every activity
C)Total product of the resource is the same in every activity
D)Average product is equal to the marginal product in every activity

Question

Quizplus · Accepted Answer

Allocating the resource in such a way that its marginal product is the same in every activity is the most efficient way of using the resource. This is because the marginal product measures the increase in output resulting from adding one more unit of the resource to the production process. If the marginal product is the same across all activities, it means that the resource is being used to produce the same additional amount of output regardless of the activity. This ensures that the resource is being utilized efficiently across all activities.

The General Rule for Allocating a Productive Resource Efficiently Across