Which of the Following Is Important in the Development of a Large

question 16

Multiple Choice

Which of the following is important in the development of a large economy dominated by trade between parties who do not know each other (depersonalized exchange) ?

• A)having few or minimal constitutional rules to avoid preventing the democratic institutions of a country from working to their fullest potential
• B)having a sound legal system that protects property and enforces contracts
• C)the presence of abundant natural resources
• D)heavy government regulation and control of prices so that individuals do not try to take advantage of one another in market exchange

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Definitions:

Normal Rate Of Return

The average expected or required return on an investment or project, reflecting the usual profit level for the market or industry.

Last Dollar Spent

The concept referring to the allocation of the final unit of currency in an economic decision-making process.

Economic Profit

The difference between total revenue and total costs, including both explicit and implicit costs, measuring the extent to which a company exceeds its break-even point.

Last Dollar Spent

A concept in consumer choice theory that refers to the allocation of the last unit of currency by a consumer to optimize utility.