Multiple Choice
Choosing between spending money on a new suit or a vacation is an example of:
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0. Basic Principles of Economics
Scarcity and Choice
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Which term best describes the act of limiting the types of goods and services produced?
A
Specialization
B
Scarcity
C
Opportunity cost
D
Marginal analysis
Verified step by step guidance1
Understand the key terms given in the problem: Scarcity, Opportunity cost, Marginal analysis, and Specialization.
Recall that Scarcity refers to the limited availability of resources, which forces choices but does not directly describe limiting types of goods produced.
Recognize that Opportunity cost is the value of the next best alternative foregone when making a choice, related to trade-offs but not specifically about limiting production types.
Know that Marginal analysis involves examining the additional benefits and costs of a decision, focusing on incremental changes rather than the overall scope of production.
Identify that Specialization means focusing resources on producing a limited range of goods or services to increase efficiency, which directly describes limiting the types of goods and services produced.
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