The Study of Economics Exists Because

question 249

Multiple Choice

The study of economics exists because:

• A)government interferes with the efficient allocation of scarce resources.
• B)resources are scarce in relation to human material wants.
• C)the market system is an obstacle to the efficient use of plentiful resources to satisfy constrained wants.
• D)resources are overly abundant as compared to wants; thus, an allocation problem exists.

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Definitions:

Net Operating Income

The total profit of a business after deducting operating expenses but before subtracting any interest or taxes.

Common Fixed Expenses

Expenses that do not vary with production or sales levels, shared across different segments or departments of a company.

Net Operating Income

A company's profit after subtracting all operational fixed and variable expenses but before interest and taxes are deducted.

Break-even Points

The level of sales at which total revenues equal total costs, resulting in no profit and no loss.