The Problem of "Scarcity" Applies

question 332

Multiple Choice

The problem of "scarcity" applies

• A) only in industrially developed countries because resources are scarce in these countries.
• B) only in underdeveloped countries because there are few productive resources in these countries.
• C) only in economic systems that are just beginning to develop because specialized resources are scarce.
• D) to all economic systems, regardless of their level of development.

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Definitions:

Total Product Curve

A graphical representation showing how the total quantity of output changes with variation in the quantity of a single input, holding other inputs constant.

Marginal Returns

The additional output gained by adding one more unit of input, holding all other inputs constant.

Minimum Efficient Scale

The minimum efficient scale is the lowest point of production where a firm can achieve the economies of scale, reducing its cost per unit to the minimum.

Economic Profits

The surplus or profit gained by a firm after subtracting all its costs, including both explicit and implicit costs, from its total revenues.