Which of the Following Is a Basic Tenant of the Economic

question 3

Multiple Choice

Which of the following is a basic tenant of the economic concept of scarcity?

• A) Developing countries will always have a battle to fight hunger.
• B) Resources are often wasted, which results in shortages.
• C) Income must be redistributed through taxation in order to address income disparity.
• D) Limited resources require economies to make choices among production alternatives.

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Definitions:

Variable Cost

Costs that vary directly with the level of production or volume of output, such as raw materials and direct labor expenses.

Restocking Costs

Expenses incurred when replenishing inventory, including purchasing, shipping, and handling costs.

Average Inventory

Average inventory is a calculation that estimates the value or quantity of inventory a company holds over a specific period, helpful for assessing inventory management efficiency.

Carrying Cost

Carrying cost refers to the total cost of holding inventory, which includes warehousing, handling, depreciation, opportunity costs, and insurance.