The Central Problem in Economics Is That Of

question 33

Multiple Choice

The central problem in economics is that of:

• A) guaranteeing an equal standard of living for every citizen in the country.
• B) allocating scarce resources such that society's unlimited wants are satis?ed in the best
• C) deciding whether a country should adopt a command economy or a market economy.
• D) ensuring that each individual contributes equally to production activities in the economy.

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Definitions:

Fixed Costs

Expenses that are constant in total, regardless of changes in the volume of activity within a relevant period.

Total Fixed Cost

Total fixed cost is an accounting term describing the sum of all expenses within a company that do not change with the level of production or sales, such as rent, salaries, and insurance.

Variable Cost Per Unit

A cost that changes with the level of output or sales, directly proportional to the amount of goods or services produced.

Earnings Before Interest And Taxes

Also known as EBIT, it measures a company's profitability before deducting interest and income tax expenses.