The Market System Is Said to Be Characterized by "Consumer

question 62

Multiple Choice

The market system is said to be characterized by "consumer sovereignty." This is because

• A)a sovereign government determines which consumer goods will be produced.
• B)the prices of consumer goods are regulated by a sovereign government.
• C)firms must match their production decisions to the consumers' choices.
• D)consumer goods are considered to be more important than capital goods.

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Definitions:

Cost-benefit Analysis

A systematic approach to estimate the strengths and weaknesses of alternatives in terms of their costs and benefits, often used in decision making and project evaluations.

Economic Efficiency

The optimal allocation of resources to maximize the production of goods and services.

Marginal Happiness

The additional satisfaction or utility that a person gains from receiving or consuming one more unit of a good or service.

Sequential Stages

Sequential stages are the consecutive phases or steps in a process or system, where each stage follows the previous one in an orderly progression.