In a Capitalist System, the Decisions and Actions of Millions

question 118

Multiple Choice

In a capitalist system, the decisions and actions of millions of consumers and firms are highly coordinated by:

• A) The state and government
• B) Markets and prices
• C) A central planning agency
• D) An international organization

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Definitions:

Utility Per Dollar

A measure of the satisfaction or usefulness obtained from purchasing goods or services relative to the amount of money spent.

Diminishing Marginal Utility

The principle stating that as more of a good or service is consumed, the marginal benefit of additional units will decline.

Utility Maximization

The process by which consumers adjust their consumption to achieve the highest level of satisfaction from their available resources.

Marginal Utility

The incremental pleasure or advantage obtained by consuming an extra unit of a good or service.