The "Informal Defence" of Free Markets Includes the Argument That

question 12

Multiple Choice

The "informal defence" of free markets includes the argument that markets

• A) achieve the maximum feasible rate of economic growth.
• B) provide automatic coordination of the actions of decentralized decision makers.
• C) lead to allocative efficiency.
• D) lead to productive efficiency.
• E) permit a centralization of economic power.

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Definitions:

Larger Percentage Increase

A situation where the rate of increase in a particular variable is higher relative to other comparable measures or periods.

Average Costs

The total cost of production divided by the number of units produced, giving the cost per unit of production.

Diminishing Returns

A principle stating that as investment in a particular area increases, the rate of profit from that investment, after a certain point, cannot continue to increase and may even decrease.

Diseconomies of Scale

A phenomenon where production costs per unit increase as a firm's output increases, often due to inefficiencies that arise when companies become too large.