Which of the Following Is Prerequisite of Successful Market Economies

question 97

Multiple Choice

Which of the following is prerequisite of successful market economies?

• A) The existence and enforcement of property rights
• B) A tax system that redistributes income from the rich to the poor
• C) The ability of the government to appropriate economic profits beyond a certain amount to ensure equality in income distribution
• D) A military presence to ensure political freedom

---

Definitions:

Insufficient Capacity

A situation where a company does not have enough resources, such as manpower or machinery, to meet current or future production demands.

Contribution Margin

The difference between sales revenue and variable costs, indicating the amount contributing to covering fixed costs and profit.

Variable Cost

A cost that changes in proportion to the level of output or activity in a business.

Special Discounted Price

A reduced price offered on goods or services, usually as part of a promotional deal or to certain groups of customers.