Which of the Following Is a Question That an Economist

question 55

Multiple Choice

Which of the following is a question that an economist would use to break down a problem?

• A)Will the average income per person for the society increase?
• B)Does the decision maker have a track record of being rational?
• C)Is there a scarce resource that must be allocated?
• D)None of these.

---

Definitions:

Safety Stock

A quantity of inventory maintained to guard against shortages or delays in supply or demand, acting as a buffer.

Stockouts

Situations where demand cannot be fulfilled because the inventory of a product is exhausted, often resulting in lost sales or customer dissatisfaction.

Inventory Carrying Costs

The total costs associated with holding inventory, including storage, handling, depreciation, and opportunity costs.

Safety Stock

Additional inventory kept on hand to guard against fluctuations in demand or supply, ensuring that sufficient quantities are available to meet customer needs.