Government Can Reallocate Resources Away from Private Goods Toward Public

question 232

Multiple Choice

Government can reallocate resources away from private goods toward public goods, usually through

• A) import tariffs and quotas.
• B) the laws of supply and demand.
• C) taxes and government spending.
• D) positive and negative externalities.

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Definitions:

Fixed Cost

Costs that do not change with the level of production or output, such as rent, salaries, and loan payments.

Variable Cost

Costs that vary based on a company's operations, including outlays for materials needed for manufacturing or other production-related inputs.

Economic Profit

The difference between a firm's total revenue and its total costs, including both explicit and implicit costs, representing the additional value created by the firm.

Accounting Profit

Accounting profit is the financial gain calculated by subtracting total explicit costs from total revenue.