Three Basic Decisions Must Be Made by All Economies

question 144

Multiple Choice

Three basic decisions must be made by all economies. What are they?

• A) how much will be produced, when it will be produced, and how much it will cost
• B) what the price of each good will be, who will produce each good, and who will consume each good
• C) what will be produced, how goods will be produced, and for whom goods will be produced
• D) how the opportunity cost principle will be applied, if and how the law of comparative advantage will be utilized, and whether the production possibilities constraint will apply

---

Definitions:

Expected Payoff

Expected Payoff is a term often used in economics and finance to describe the average outcome of a set of uncertain events, considering each possible outcome and its probability.

Perfect Information

A situation in which all participants have access to all the information needed to make an informed decision.

State Of Nature

A term in decision theory and statistics referring to the actual outcome or underlying reality that affects decision-making or outcomes.

Sample Information

Information or data collected from a subset of a larger population, used to infer characteristics or parameters of the whole population.