What are the goals of an economic system? What is the criterion to measure the effectiveness of a system?
What will be an ideal response?
Every economic system is confronted with three basic issues: what to produce, how to produce, and for whom to produce. One can answer these questions using a centrally planned system, or allowing the markets to find a solution, or generating a mixed economy. Economists use the Pareto efficiency criterion to measure the effectiveness of an economic activity. According to this criterion, an economic activity is not effective if there is another allocation of resources that can make someone better off without hurting anyone else.
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What is shown on a firm's income statement?
A) costs B) profits C) revenues D) All of these are shown on a firm's income statement.
Refer to the table below. Based on the data, you can conclude that the consumer:
The table below shows a consumer's utility schedule.
A. Receives increasing marginal utility from consuming the first three units
B. Experiences diminishing marginal utility after consuming the first unit
C. Experiences diminishing marginal utility only after consuming the fourth unit
D. Will never consume just one unit of the product