A System Where the Basic Economic Questions Are Determined, at Least

question 189

Multiple Choice

A system where the basic economic questions are determined, at least to some degree, through centralised government planning is referred to as a ____ economy.

• A) Command
• B) Capitalistic
• C) Mixed
• D) laissez-faire
• E) communal

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Definitions:

Giffen Good

A product that experiences an increase in demand as its price increases, contrary to the law of demand, typically because it is a staple whose cheaper substitutes are not as affordable.

Inferior Good

A type of good for which demand decreases as the income of the consumer increases, contrary to normal goods.

Normal Good

A good for which demand increases as the income of consumers increases and vice versa, all else being constant.

WARP

WARP, or the Weak Axiom of Revealed Preference, is an economic principle stating that if a consumer chooses one bundle of goods over another when both are available, then they will not choose the second bundle when the first one remains available.