To Deal with the Problem of Scarcity, Every Society Must

question 20

Multiple Choice

To deal with the problem of scarcity, every society must:

• A) place a limit on human needs and wants.
• B) reduce the quantity of resources that are allocated to production.
• C) distribute income equally among all its citizens.
• D) make choices about what is to be produced, how and for whom.

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Definitions:

Income Tax Rate

The percentage of an individual or company's income that is paid to the government as tax.

After-Tax Discount Rate

The discount rate used in capital budgeting that accounts for taxes and reflects the net cost of borrowing and the opportunity cost of investing.

Straight-Line Depreciation

A method of calculating depreciation of an asset, where the expense is evenly spread over its useful life.

Initial Investments

The initial capital outlay required to start a business, purchase assets, or invest in securities.