Which of the Following Is a Key Difference Between the Economic

question 155

Multiple Choice

Which of the following is a key difference between the economic activities of government and those of private firms?

• A) Private firms face the constraint of scarcity; government does not.
• B) Government focuses primarily on equity; private firms focus only on efficiency.
• C) Private economic activities create externalities; government activities do not.
• D) Government has the legal right to force people to do things; private firms do not.

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Definitions:

Entrepreneurs

Individuals who initiate, manage, and assume the risks of starting and operating a new business or venture to bring innovations or new products to market.

Saving and Investment

The process of setting aside money for future income or profit, including purchasing assets like stocks, bonds, or real estate.

Law and Order

The legal and societal framework aimed at ensuring public safety, peace, and justice through the enforcement of laws.

Institutional Change

The process by which institutions evolve and adapt over time, often in response to changes in external conditions or internal dynamics.