The Inputs Used to Produce Goods and Services Are Also

question 106

Multiple Choice

The inputs used to produce goods and services are also called

• A) productivity indicators.
• B) capitalization producers.
• C) production functions.
• D) factors of production.

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Definitions:

Consumer Optimum

A state where a consumer has allocated their resources in such a way that maximizes their utility, given their budget constraint.

Income Effect

The change in consumption that results from changes in real income, affecting the purchasing power of consumers.

Substitution Effect

The economic understanding that as prices rise or income decreases, consumers replace more expensive items with less costly alternatives.

Wage Increase

A rise in the rate of pay employees receive for their work.