Which of the Following Is NOT True About a Market-Directed

question 130

Multiple Choice

Which of the following is NOT true about a market-directed economy?

• A) Consumers enjoy maximum freedom of choice.
• B) Producers enjoy maximum freedom of choice.
• C) The interaction between consumers and producers is great.
• D) Government is responsible for setting up all marketing activities.
• E) The price of a consumer product serves as a measure of its value.

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Definitions:

Marginal Product

The additional output resulting from a one-unit increase in the use of a variable input while holding other inputs constant.

Marginal Cost

The fees associated with creating one additional unit of a good or service.

Average Variable Cost

The per-unit variable cost, determined by dividing the overall variable expenses by the amount of output generated.

Total Variable Cost

The sum of all costs that vary with output level, including costs of direct materials, direct labor, and other expenses that increase or decrease as production volume changes.