Jose and Julia Were Discussing the Necessary Components to Achieve

question 118

Multiple Choice

Jose and Julia were discussing the necessary components to achieve economic growth.Jose stated that the economy must include free markets,specialization and trade,and an ethical judicial system.Julia reminded Jose that another key component is

• A)freedom of speech.
• B)freedom of religion.
• C)a guaranteed high rate of return on savings.
• D)property rights.
• E)democracy.

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Definitions:

Profit-maximize

A strategy where a firm makes decisions intended to achieve the highest possible profit.

Profit-maximizing

The point at which a firm achieves the highest possible profit, where the marginal cost of production equals the marginal revenue from sales.

Total Revenue

The total receipts from sales of goods or services over a certain period of time before any expenses are subtracted.

Variable Input

An input in the production process that changes quantity with the level of output, such as labor or raw materials.