Which of the following is an example of a production decision in economics?

• A. A bank determines the interest rate for savings accounts.
• B. A government sets the minimum wage for workers.
• C. A consumer chooses between buying apples or oranges.
• D. A firm decides how many units of a product to manufacture this month.

Answer: (D)

Verified step by step guidance

1. Understand what a production decision means in economics: it involves choices made by firms about how much to produce, what inputs to use, and how to organize production to maximize profits.
2. Analyze each option to see if it relates to production decisions made by firms:
3. Option 1: A bank determining interest rates is a financial decision, not a production decision.
4. Option 2: A government setting minimum wage is a policy decision, not a production decision by a firm.
5. Option 3: A consumer choosing between apples or oranges is a consumption decision, not a production decision.
6. Option 4: A firm deciding how many units of a product to manufacture is directly related to production decisions, as it involves determining output levels.