What Does a Successful Market Economy Require

question 8

Multiple Choice

What does a successful market economy require?

• A)A government-controlled banking system and government price controls
• B)Well-defined property rights and an independent court system to adjudicate disputes based on the law
• C)Generous unemployment benefits and paid medical leave for everyone in the labour force
• D)An equitable distribution of income and limits on immigration

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Definitions:

Scarcity

The limits placed on the amounts and types of goods and services available for consumption as the result of there being only limited economic resources from which to produce output; the fundamental economic constraint that creates opportunity costs and that necessitates the use of marginal analysis (cost-benefit analysis) to make optimal choices.

Opportunity Costs

Missing out on potential gains from various alternatives once a particular option is picked.

Economics Quiz

A set of questions designed to test knowledge and understanding of economic principles and theories.

Marginal Benefit

The additional satisfaction or utility gained from consuming or using one more unit of a good or service.