The Mechanism of Supply and Demand Is

question 224

Multiple Choice

The mechanism of supply and demand is

• A)a fundamental tool in both microeconomics and macroeconomics.
• B)the only real "law" of economics.
• C)a fundamental tool only in microeconomics.
• D)a fundamental tool only in macroeconomics.

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Definitions:

Production

The process of creating goods or services by combining various inputs in order to make products that are suitable for consumption or further production.

Increasing Returns To Scale

A situation in production where an increase in the scale of inputs leads to a more than proportional increase in output.

Weak Axiom

In consumer theory, it refers to the consistency of consumer choice behavior under the assumption of non-increasing preferences.

Profit-maximizing Behavior

An economic principle where businesses seek to achieve the highest possible profit from their operations.