According to the Text, Economics Is the Study of How

question 93

Multiple Choice

According to the text, economics is the study of how:

• A) governments allocate resources in the face of constraints.
• B) government policies can be used to meet individuals' wants and desires.
• C) human beings coordinate their wants and desires.
• D) scarce resources are allocated between capitalists and workers.

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Definitions:

Diminishing Returns

A principle stating that if one factor of production is increased while others are held constant, the overall returns will eventually decrease after a certain point.

Marginal Product

The additional output that results from using one more unit of a particular input, while holding other inputs constant.

Average Product

The output obtained by dividing the total product by the number of units of the variable input used in production, ideally reflecting productivity per input unit.

Total Product

The total output or quantity of goods produced by a firm or economy at a given level of input.