Which of the Following Is the Best Definition of Economics

question 170

Multiple Choice

Which of the following is the best definition of economics?

• A) the study of how individuals and societies choose to use the scarce resources that nature and previous generations have provided
• B) the study of how consumers spend their income
• C) the study of how business firms decide what inputs to hire and what outputs to produce
• D) the study of how the federal government allocates tax dollars

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Definitions:

Producer Surplus

The difference between the amount a producer is paid for a good compared to the minimum amount they would be willing to accept for it, a measure of producer welfare.

Price

The sum of money needed to buy a product, service, or commodity.

Quantity

The amount or number of a material or immaterial good considered as a unit or in discrete amounts.

Producer Surplus

The difference between what producers are willing to accept for a good versus what they actually receive in the market.