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

The most efficient allocation of a productive resource across different production activities of the same product is achieved when the marginal product of the resource is the same in every activity. This means that the additional output produced by the last unit of the resource used in each activity is the same. If this condition is not met, reallocating the resource can increase total output without increasing the usage of the resource. Allocating the resource where the marginal product is highest would lead to the maximum total output.

The General Rule for Allocating a Productive Resource Efficiently Across