Which of the Following Is a Correct Characterization of Socialism

question 38

Multiple Choice

Which of the following is a correct characterization of socialism?

• A) Tradition answers the basic economic questions.
• B) Markets are used exclusively to answer the basic economic questions.
• C) Central planning is seldom used to answer the basic economic questions.
• D) Government ownership of many resources and centralized decision-making answers the basic economic questions.

---

Definitions:

Natural Monopolist

A natural monopolist is a single supplier in a market that can produce the total quantity of a good or service demanded at a lower cost than if there were multiple suppliers, due to high fixed costs and economies of scale.

Price-Regulated

A market condition where the government sets the maximum or minimum prices for certain goods or services to protect consumer interests or ensure affordability.

Marginal Cost

The extra expense associated with the creation of an additional unit of a product or service.

Deadweight Loss

A loss of economic efficiency that can occur when the equilibrium for a good or a service is not achieved or is not achievable, leading to a mismatch in supply and demand.