16 Questions
Which of the following is an example of an investment good?
Machinery
What characterizes Veblen Goods according to the text?
They are consumed more as the price rises
How do consumption goods differ from investment goods based on the text?
Investment goods contribute to daily well-being
According to Engel’s Law, what happens as income rises?
The percentage of income spent on consumption decreases
What determines the value of economic goods according to the text?
Scarcity rather than utility
Why is the worth of a diamond higher than that of water?
Due to its scarcity
What is the characteristic of a centralized monetary system?
Controlled by a single authority like a government
How do lower-income individuals allocate their income according to Engel's Law?
More on necessities like food and basic services
What does Douglass North specialize in?
Economic history
Which of the following is considered an input according to the text?
Cement
What are the four categories of special inputs mentioned in the text?
Labor, land, capital, entrepreneurship
What does allocative efficiency refer to?
Ensuring all goods and services meet the needs and wants of society
How are legally prohibited practices impacting the economic productivity of a state addressed in the text?
They are not reflected in the productivity index
What is the purpose of a Production Possibility Curve (PPC)?
To represent all possible combinations of two goods that can be produced
Which economic system relies on decision-making based on ancestral practices?
Traditional Economy
What aspect do Fundamental Economic Decisions address?
Deciding what, how, how much, and for whom to produce
Test your knowledge on the effects of environment, institutions, legal systems, culture, and religious beliefs on the economic productivity of a state. Learn about how legally prohibited practices impact the productivity index and the distinction between resources and inputs.
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