The Basic Goal of Economics Is to

question 107

Multiple Choice

The basic goal of economics is to

• A) control the effects of government action.
• B) determine how to distribute all that is produced in an economy.
• C) address the scarcity problem created because the population's desire for goods exceeds the ability to produce them.
• D) match limited resources to people's limited wants and needs.
• E) control tastes and wishes so that there will be enough resources to produce all the goods and services that people want.

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Definitions:

Supply Equation

A mathematical formula used to describe the relationship between the price of a good or service and the quantity supplied, holding other factors constant.

Price Floor

A government- or authority-imposed minimum price that can legally be charged for a good or service.

Shortage/Surplus

A market condition where the quantity demanded exceeds supply (shortage) or supply exceeds demand (surplus), affecting prices and availability.

Demand Equation

A mathematical expression that describes the relationship between the quantity demanded of a good and its price, along with other factors like income and price of related goods.