An Economic System

question 74

Multiple Choice

An economic system

• A)requires a grouping of private markets linked to one another.
• B)is a particular set of institutional arrangements and a coordinating mechanism used to respond to the economizing problem.
• C)requires some sort of centralized authority (such as government)to coordinate economic activity.
• D)is a plan or scheme that allows a firm to make money at some other firm's expense.

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Definitions:

Decreasing-cost Industry

An industry where average costs of production decrease as the industry grows, often due to economies of scale.

Demand Curve

An economic representation that illustrates the quantity of a good that consumers are willing and able to buy at various prices, typically downward sloping from left to right.

Productive Efficiency

A state where goods are produced at the lowest possible cost, utilizing resources effectively without waste.

Average Total Cost

The total cost of production (fixed and variable costs combined) divided by the number of units produced, showing the cost per unit of output.