A Major Feature of a Market System Is That

question 49

Multiple Choice

A major feature of a market system is that:

• A) there is economic equality.
• B) there is consumer sovereignty.
• C) there is full employment.
• D) all producers make profits.

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Definitions:

Diminishing Returns

A principle in economics indicating that adding more of one factor of production, while holding others constant, will at some point yield lower incremental per-unit returns.

Constant Costs

Costs that remain the same in total, regardless of changes in the volume of goods or services produced.

Average Variable Cost

The total variable costs of production divided by the quantity of output produced; it shows the variable cost per unit.

Average Fixed Cost

The fixed costs of production (costs that do not change with the level of output) divided by the quantity of output produced, decreases as production increases.