In a Market Economy, What Groups Decide the Amount of a Good

question 281

Multiple Choice

In a market economy, what groups decide the amount of a good that is produced?

• A) buyers and sellers
• B) producers and input suppliers
• C) all consumers
• D) producers and government planning committees

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Definitions:

Economic Profits

The margin by which a firm's total sales exceed its complete set of expenses, both overt and covert.

Labor

Human effort, either physical or mental, used in the production of goods and services.

Capital

Financial assets or the financial value of assets, such as cash and buildings, used by a business to produce goods or services.

Least-Cost Combination

An economic principle where firms aim to achieve the lowest possible cost of production by efficiently combining resources.