The market system is said to be characterized by "consumer sovereignty." This is because:
A. A sovereign government determines which consumer goods will be produced
B. The prices of consumer goods are regulated by a sovereign government
C. Firms must match their production decisions to the consumers' choices
D. Consumer goods are considered to be more important than capital goods
Answer: C
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Getting a college degree is an example of investing in
A. physical capital. B. research and development. C. technology. D. human capital.
When the price of a product exceeds the marginal cost of producing it, producers have a
A) consumer surplus. B) producer surplus. C) consumer shortage. D) producer shortage. E) deadweight surplus.
Why do market failures arise in case of public goods?
a. The quantity produced is much more than is actually required by the people. b. The quality of these goods is not good enough. c. The quantity produced is too less from the society's point of view. d. The government wastes a lot of resources for producing a public good. e. The users of such goods are required to pay a high price for these goods.
To achieve a high standard of living, a nation should: a. increase welfare payments to the poor
b. use less capital and more labor in the production process. c. promote economic growth. d. increase the tax deduction for child dependents.