By Summing the Values Added at Each Stage in the Production

question 105

Multiple Choice

By summing the values added at each stage in the production of some good we obtain:

• A) the price of that good.
• B) the total income generated by that good's production.
• C) the total cost (including profits)of that product.
• D) all of the above.

---

Definitions:

Free Markets

An economic system in which prices are determined by unrestricted competition between privately owned businesses, without government intervention.

Efficiency

The optimal allocation of resources to produce the maximum amount of goods and services, with the least waste of resources.

Pareto Optimality

Pareto Optimality is a state of allocation of resources in which it is impossible to make any one individual better off without making at least one individual worse off.

Income Distribution

Income Distribution refers to the way in which total income is shared among the members of a society.