Which fundamental economic question requires society to decide the mix and quantity of goods and services it will produce?
A. The What to Produce question.
B. The Why to Produce question.
C. The How to Produce question.
D. The For Whom to Produce question.
Answer: A
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Producer surplus is the sum of the profits earned by all firms in a market
Indicate whether the statement is true or false
Which of the following will be most likely to cause the production possibilities curve for a country to shift inward?
a. an increase in the labor force b. an increase in unemployment c. development of an improved technological method of production d. a decrease in the stock of physical capital
Relative to a world in which some people are motivated by nonmaterial incentives, if all people were motivated solely by financial incentives, then:
A. there would be no commitment problems. B. both business transactions and personal interactions would be different. C. transactions in the business world would be the same, but personal interactions would not. D. economic efficiency would be achieved more often.
Market economies with legal systems that provide for the reliable protection of property rights and enforcement of contracts tend to promote economic growth.
a. true b. false