In Countries Where Businesses Are Government Owned

question 117

Multiple Choice

In countries where businesses are government owned,

• A) there is less incentive to work hard.
• B) the right amount of each good is produced.
• C) profits tend to be higher.
• D) the quality of goods is high but profits are low.

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Definitions:

Marginal Cost

The cost added by producing one additional unit of a product, focusing on changes in overall cost with slight increases in production.

Sunk Costs

Costs that have already been incurred and cannot be recovered.

Marginal Analysis

The examination of the benefits and costs of an additional unit of consumption or production to make decisions on allocations of resources.

Risk Aversion

The behavior of preferring to avoid loss rather than making a gain, reflecting a preference for certainty over uncertainty.