In the Case of a Private Good, Which of the Following

question 190

Multiple Choice

In the case of a private good, which of the following forms of economic organization will result in the strongest incentive for consumers and producers to economize?

• A) The good is produced privately and taxes are used to provide it to consumers free of charge.
• B) The good is produced privately and consumers purchase it with their own money.
• C) The good is produced by government enterprises and the cost of its production is covered by taxes.
• D) The good is produced by government enterprises and consumers purchase it with their own money.

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Definitions:

Net Income

The amount of money left after subtracting all expenses, taxes, and costs from total revenue.

Variable Cost

A cost that varies depending on the level of output or activity, such as materials or labor costs in manufacturing.

Fixed Cost

A periodic cost that does not vary with production volume or sales.

Variable Costs

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