The deeds and actions of a producer in deciding what and how much to produce indicate what kind of authority in an economy?

• A. Government regulation
• B. Producer sovereignty
• C. Entrepreneurial authority
• D. Consumer sovereignty

Answer: (B)

Verified step by step guidance

1. Understand the concept of 'authority' in an economic context, which refers to who makes the decisions about production and resource allocation.
2. Identify the role of the producer in the economy, specifically focusing on their decisions about what goods and services to produce and in what quantities.
3. Recognize that when producers have the power to decide what and how much to produce, this reflects a type of authority known as 'Producer sovereignty.'
4. Differentiate 'Producer sovereignty' from other types of authority such as 'Government regulation' (where the government controls production), 'Consumer sovereignty' (where consumers dictate production through their preferences), and 'Entrepreneurial authority' (which emphasizes innovation and risk-taking but not necessarily decision-making power over production).
5. Conclude that the deeds and actions of a producer in deciding what and how much to produce indicate 'Producer sovereignty' as the kind of authority in an economy.