Which of the Following Is a Characteristic of Pure Capitalism

question 87

Multiple Choice

Which of the following is a characteristic of pure capitalism?

• A)all resources are owned communally
• B)economic activity is coordinated by government decision makers
• C)the price system is used to guide resources to their highest-valued uses
• D)centralized economic planning is used to answer the basic economic questions
• E)individual choices are reflected only through collective decisions

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Definitions:

Conversion Cost

The combined cost of direct labor and manufacturing overheads incurred to convert raw materials into finished goods.

Direct Labor

The wages or salaries paid to workers directly involved in the production of goods or services.

Indirect Material Cost

Costs of materials that are part of the production process but are not directly traceable to a finished product.

Lubricants

Substances applied to reduce friction between surfaces in mutual contact, which ultimately decreases the heat generated when the surfaces move.