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JAMB Economics 1989 Question 5

Question 5

Theory of Production

Efficiency in production involves

  1. A.reducing the size of the workforce
  2. B.producing a given output with the lowest cost combination of factors of production
  3. C.adoption of capital-intensive technology
  4. D.increasing the quantity of the fixed factor of production.
Show the answer and explanation

Answer: B (producing a given output with the lowest cost combination of factors of production)

Explanation

A firm is efficient when it produces its output at the lowest possible cost.