12. Which of the following is a fundamental characteristic of the market system?
ID: 1134468 • Letter: 1
Question
12. Which of the following is a fundamental characteristic of the market system? A. resources are privately owned. B. central planning by government C. unselfish behavior D. government-set wages and prices. 13. The pursuit of self-interest: A. is highly detrimental to the market system. B. means the same as "selfishness." C. is reflected in the behavior of firms, but not in the behavior of consumers. D gives direction to the market system. 14. The market system's answer to the fundamental question "What will be produced?" is essentially: A. "Goods and services that are profitable." B. "Low cost goods and services." C. "Goods and service that can be produced using large amounts of capital. D. "Goods and services that possess lasting value." 15. The market system's answer to the fundamental question "How will the goods and services be produced?" is essentially: A. "With as much machinery as possible. B. "Using the latest technology." C. "By exploiting labor." D. "Using the least-cost production techniques."Explanation / Answer
12.
In market system individual owns and control the economic resources and decides how to allocate these resources to produce goods and services. The market decides how to distribute these goods to fulfill economic want.
The property right is the right to rip all the benefit from the owned resources, and right to employ and control the owned resources in best uses. The property right ensures the profit and benefit of owing a resource reaches the resource owner. This works as a driving force to invest and risk-taking behavior of the individual.
Therefore, the correct option is: (A)
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13.
In market system each consumer gives dollar votes through the price they are willing to pay for a good. If this value is greater than the cost of the production of the good the firm produces the good and earn profit. The profit drives the production in the economy, no one produces and sell a loss making good or service. Thus, the market system is a profit and loss-making system that decides what, how, and in what quantity to produce. Then the market system is depending on the self interest driven agents. this is called the pursuit of self interest.
Therefore, the correct option is: (D)
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14.
In market system each consumer gives dollar votes through the price they are willing to pay for a good. If this value is greater than the cost of the production of the good the firm produces the good and earn profit. The profit drives the production in the economy, no one produces and sell a loss making good or service. Thus, the market system is a profit and loss-making system that decides what, how, and in what quantity to produce.
Therefore, the correct option is: (A)
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15.
In market system each consumer gives dollar votes through the price they are willing to pay for a good. If this value is greater than the cost of the production of the good the firm produces the good and earn profit. The profit drives the production in the economy, no one produces and sell a loss making good or service. Thus, the market system is a profit and loss-making system that decides what, how, and in what quantity to produce.
Therefore, the correct option is: (D)
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