Under a Capitalistic System, Decisions Such as What Goods and Services

question 226

Multiple Choice

Under a capitalistic system, decisions such as what goods and services to produce, what to charge, and how much to import or export are made by:

• A)A variety of government agencies.
• B)Individuals.
• C)A central planning board that consists of legislators and attorneys.
• D)Majority rule, with everyone receiving an equal vote.

---

Definitions:

Implicit Cost

The opportunity cost equal to what a firm must give up in order to use resources that it already owns, without directly paying for them.

Leasing

A contractual arrangement where one party (the lessor) grants another party (the lessee) the right to use an asset for a specified period in return for regular payments.

Wages Forgone

The potential earnings that are lost or given up by choosing one alternative over another, often considered in decisions about education or training.

Implicit Costs

The opportunity costs of using resources owned by the firm for its own use, rather than selling them for a profit elsewhere.