What is the ultimate goal of all economic activity?

• A. To minimize production costs
• B. To achieve full employment
• C. To maximize societal welfare
• D. To increase government revenue

Answer: (C)

Verified step by step guidance

1. Understand that economic activity involves the production, distribution, and consumption of goods and services within a society.
2. Recognize that while minimizing production costs, achieving full employment, and increasing government revenue are important objectives, they are typically means to an end rather than the ultimate goal.
3. Identify that the ultimate goal of all economic activity is to maximize societal welfare, which means improving the overall well-being and standard of living of the members of society.
4. Consider that maximizing societal welfare involves efficient allocation of resources, equity, and sustainability to ensure that the benefits of economic activity are widespread and long-lasting.
5. Conclude that economic policies and decisions are generally evaluated based on how well they contribute to maximizing societal welfare rather than focusing solely on individual objectives like cost minimization or revenue generation.