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Questions and Answers
Why is resource allocation a critical problem in economies?
Why is resource allocation a critical problem in economies?
- Because the wants of the members of the society are limited
- Because the resources of a society are unlimited
- Because the government controls the allocation of resources
- Because the resources of a society are limited in supply, whereas the wants of the members are unlimited (correct)
What is the primary goal of resource allocation in an economy?
What is the primary goal of resource allocation in an economy?
- To maximize profit for private companies
- To provide equal distribution of resources to all members of society
- To allocate resources according to government priorities
- To minimize waste and inefficiency (correct)
What determines the allocation of resources in the private sector?
What determines the allocation of resources in the private sector?
- Government revenue and expenditure activities
- Government budgeting and consumer needs
- Consumer sovereignty and producer profit motives
- Market supply and demand, and price mechanism (correct)
What type of goods will not be produced in sufficient quantities by the market?
What type of goods will not be produced in sufficient quantities by the market?
What determines the allocation of resources in the public sector?
What determines the allocation of resources in the public sector?
What is allocative efficiency concerned with?
What is allocative efficiency concerned with?
What is a necessary condition for efficient allocation of resources in an economy?
What is a necessary condition for efficient allocation of resources in an economy?
What is a reason for market failures leading to misallocation of resources?
What is a reason for market failures leading to misallocation of resources?
What is an example of a good that markets may fail to provide?
What is an example of a good that markets may fail to provide?
What is the result of imperfect competition and presence of monopoly power in a market?
What is the result of imperfect competition and presence of monopoly power in a market?
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