Which of the Following Statements Best Describes the Study of Economics

question 57

Multiple Choice

Which of the following statements best describes the study of economics? Economics studies how

• A) to organize production so that scarcity does not occur.
• B) firms make profits.
• C) we make choices in the face of scarcity.
• D) to create incentives so that scarcity does not exist.
• E) businesses reach decisions.

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Definitions:

Required Rate Of Return

The minimum expected yield by investors for providing capital to a company, influenced by risk and market conditions.

Net Operating Income

The profit generated from a company's regular business operations, excluding revenues and expenses from non-operating activities.

Contribution Margin Ratio

The proportion of sales revenue that is not consumed by variable costs and therefore contributes to covering fixed costs.

Fixed Expenses

Costs that remain constant for a period of time regardless of production levels or business activity.