If Dairy Farmers Use Automatic Milking Machines Instead of Milking

question 53

Multiple Choice

If dairy farmers use automatic milking machines instead of milking by hand, which economic question does their decision answer?

• A)What to produce?
• B)How to produce?
• C)For whom to produce?
• D)Who has a comparative advantage in milking?
• E)What is the price of milk?

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Definitions:

Prefer

Expressing a choice or inclination towards one option or item over another.

Market Basket

A set of goods and services that are typically consumed by a household or used to track the cost of living or inflation.

Perfect Substitutes

Goods or services that can be used in place of one another with no loss of utility by the consumer.

Perfect Complements

Goods that are always used together in fixed proportions, such that the utility derived from consuming one good increases the utility of consuming the other.