How Are the Fundamental Economic Questions Answered in a Market

question 171

Multiple Choice

How are the fundamental economic questions answered in a market economy?

• A)The government alone decides the answers.
• B)Individuals, firms, and the government interact in markets to decide the answers to these questions.
• C)Households and firms interact in markets to decide the answers to these questions.
• D)Large corporations alone decide the answers.

---

Definitions:

Limited Capacity

The concept that there is a finite amount of information or stimuli that an individual can process at any given time.

Sensory Register

A cognitive system that temporarily holds sensory information in its original sensory form until it can be processed further.

Parallel Distributed Processing

A computational approach in cognitive science that models thought processes using networks that parallel human brain’s neural networks.

Serial Processing

A method of information processing in which operations are carried out one after another in a sequence.