Question

MBA 603- Managerial Economics Chapter 1 Introduction Multiple-Choice Questions ) Which of the following is an example of how the question of"what goods and services to produce?" is answered by the command process? A) government subsidies for affordable housing B) laws regarding equal opportunity in employment C) government allowance for the deduction of interest payments on private mortgages D) government regulations concerning the dumping of industrial waste 2) Opportunity cost is best defined as A) the amount given up when choosing one activity over all other alternatives B) the amount given up when choosing one activity over the next best alternative. C) the opportunity to earn a profit that is greater than the one currently being made D) the amount that is given up when choosing an activity that is not as good as the next best alternative. 3) In a market economy, which of the following is the most important factor affecting scarcity? A) the needs and wants of consumers B) the price of the product C) the degree to which the government is involved in the allocation of resources. D) All of the above are equally important. 4) Which of the following is not considered by economists to be a basic resource or factor of production? A) money B) machinery and equipment C) technology D) unskilled labor

Answer 1

Solution-

1) Which of the following is an example of how the question of "what goods and services to produce?" is answered by the command process?

The correct option is A. government subsidies for affordable housing.

2) Opportunity cost is best defined as the amount given up when choosing one activity over the next best alternative.

The correct option is B. the amount given up when choosing one activity over the next best alternative.

3) In a market economy, which of the following is the most important factor affecting scarcity?

The correct option is A. The needs and wants of consumers.

4) Which of the following is not considered by economists to be a basic resource or factor of production?

The correct option is A. Money.