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Questions and Answers
What is the term used to describe the cost of using land and labor for timber production?
What is the term used to describe the cost of using land and labor for timber production?
- Opportunity cost (correct)
- Profit margin
- Marginal cost
- Total cost
How does competition for resources in timber production ensure that prices reflect their opportunity costs?
How does competition for resources in timber production ensure that prices reflect their opportunity costs?
- By allowing market forces to allocate resources efficiently (correct)
- By increasing government intervention
- By setting price ceilings
- By encouraging resource hoarding
Which concept refers to the situation where markets fail to allocate resources efficiently?
Which concept refers to the situation where markets fail to allocate resources efficiently?
- Market failure (correct)
- Policy failure
- Externality
- Opportunity cost
What term describes effects, positive or negative, that are not reflected in the market price of a good or service?
What term describes effects, positive or negative, that are not reflected in the market price of a good or service?
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Which term is used to describe the failure of government policies to achieve their intended outcomes?
Which term is used to describe the failure of government policies to achieve their intended outcomes?
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What theory suggests that individuals making government decisions primarily act in their self-interest?
What theory suggests that individuals making government decisions primarily act in their self-interest?
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