A Basic Task of Any Economic System Is to

question 43

Multiple Choice

A basic task of any economic system is to

• A) ensure that producers and consumers have the maximum freedom of choice in their economic decisions.
• B) increase the size of its population relative to its annual output.
• C) estimate its per capita output annually.
• D) promote the use of money for exchanging goods and services.
• E) make decisions regarding the degree of economic egalitarianism.

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Definitions:

Operating Income

The income a business receives after subtracting operating costs from its gross profit.

Fixed Costs

Costs that do not change with the level of production or sales activities, such as rent, salaries, and insurance premiums.

Variable Costs

Costs that change in proportion to the level of production or business activity.

Unit Contribution Margin

The amount each unit sold contributes to fixed costs and profit after variable costs are subtracted.