If a Producer Can Use Its Factors of Production to Produce

question 149

Multiple Choice

If a producer can use its factors of production to produce either good A or good B,then a rise in the price of A

• A)increases the supply of B.
• B)decreases the supply of A.
• C)increases the supply of A.
• D)decreases the supply of B.
• E)both C and D.

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Definitions:

Market System

In this economic framework, the determination of investment, manufacturing, and allocation follows the principles of supply and demand, allowing prices for goods and services to be set freely within an open pricing system.

Allocates Resources

the process of distributing available resources among various uses to achieve optimal outcomes or objectives.

Economic Freedom

The degree to which individuals and businesses can make economic decisions without government intervention.

Central Planning

A system where the government or a centralized authority makes all decisions about the production and distribution of goods and services.