A Key Theme Fundamental to All of Economics Is That

question 72

Multiple Choice

A key theme fundamental to all of economics is that:

• A)wants are limited.
• B)the United States is a rich country, but we are simply not aware of it.
• C)people have unlimited wants but limited means to satisfy them.
• D)resources are unlimited.

Understand the role and function of market prices under competitive conditions.

Recognize the significance of Adam Smith's Invisible Hand principle in promoting general welfare through self-interested actions in competitive markets.

Comprehend how prices coordinate the actions of buyers and sellers in a market economy.

Identify factors that cause changes in supply, demand, equilibrium price, and equilibrium quantity.

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Definitions:

Total Product

The total quantity of output produced by a firm or economy as a result of its production process.

Marginal Product

The additional output that is produced by adding one more unit of a factor, such as labor or capital.

Bushels

A measure of volume that is used for quantities of grain, fruit, or other produce.

Variable Input

Variable input refers to a production factor that can be adjusted in the short term to increase or decrease production output.