Nonprice Rationing Devices Are Required

question 360

Multiple Choice

Nonprice rationing devices are required

• A) because the price system does not allocate resources efficiently.
• B) when there are price floors but not when there are price ceilings.
• C) so that prices will go back to equilibrium.
• D) to allocate goods when there is a price ceiling.

Recognize the significance of entrepreneurship in economic development.

Identify the role of human capital and infrastructure in economic growth.

Evaluate the impact of government policies on economic development and growth.

Understand the use of experimental and non-experimental methods in economic studies.

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Definitions:

Variable Cost

Expenses that change in proportion to the activity of a business such as raw materials and direct labor costs.

Fixed Cost

Payments that do not vary with the amount of production or sales activities, including costs like renting spaces, salary payouts, and insurance contributions.

Operating Leverage

Operating leverage describes the extent to which a company can increase its profits by increasing sales, highlighting the ratio of fixed costs to variable costs.

Net Operating Income

The amount of profit a company makes from its normal business operations, excluding any income or costs from investments and other non-core business activities.