Multiple Choice
Which of the following best explains why producers choose to specialize?
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0. Basic Principles of Economics
Factors of Production
Multiple Choice
Which of the following is the case where capacity is measured in terms of inputs?
A
Technical capacity
B
Productive capacity
C
Market capacity
D
Economic capacity
Verified step by step guidance1
Step 1: Understand the concept of capacity in microeconomics, which generally refers to the maximum output or level of activity that a firm or production process can achieve under given conditions.
Step 2: Recognize that capacity can be measured in different ways, such as in terms of inputs (resources used), outputs (products produced), or market factors (demand or economic conditions).
Step 3: Define 'Technical capacity' as the maximum level of output that can be produced with a given set of inputs and technology, focusing on the physical or technical limits of production.
Step 4: Note that 'Productive capacity' usually refers to the maximum output achievable, often measured in terms of output rather than inputs.
Step 5: Conclude that when capacity is measured in terms of inputs (like labor, capital, or raw materials), it is referred to as 'Technical capacity'.
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