Which of the Following Statements Describes the Force That Drives

question 60

Multiple Choice

Which of the following statements describes the force that drives the distribution of resources (goods and services,labor,and money) in a free-enterprise economy?

• A)Prices for goods and services vary according to the changes in supply and demand.
• B)Supply and demand curves intersect at the point where supply and demand are not equal.
• C)Changing the price of a product does not alter the supply curve.
• D)The price at which the number of products that businesses are willing to supply is inversely proportional to the amount of products that consumers are willing to buy at a specific point in time.
• E)Businesses are willing to supply more of a good or service at higher prices because the potential for profits is higher.

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Definitions:

Cost-Benefit Analysis

A process used to evaluate the total anticipated costs of a project compared to its benefits, aiming to determine the best course of action.

Cost-Benefit Analysts

Professionals who evaluate the financial implications and outcomes of actions and projects, comparing the total expected costs against the total expected benefits to determine the best course of action.

Tragedy of the Commons

The Tragedy of the Commons is a situation in a shared-resource system where individual users acting independently and rationally according to their own self-interest behave contrary to the common good of all users by depleting or spoiling the shared resource.

Economically Efficient

A situation where resources are allocated in a way that maximizes the net benefits to society or achieves the desired output with the least possible input.