Correct Answer: C. Production possibility curve

Correct Answer: D. highest output per head

Correct Answer: C. normal profit

Correct Answer: B. provide a device through which credit creation by banks can be controlled

Explanation

(i) Price of goods is determined by the interaction of the forces of demand and supply.

(ii) If the price is at a level where supply is less than demand, then there will be excess demand which may increase the price. For example, at price OP\(_1\), OQ\(_2\) was supplied while OQ\(_3\) was demanded.

(iii) If the price is at a level where supply is greater than demand (above equilibrium), there would be excess supply, leading to a fall in price. For example, at price OP\(_2\), OQ\(_4\) was supplied while OQ\(_1\) was demanded.

(iv) The equilibrium price is OP\(_0\) where demand is equal to supply. There is no tendency for price to change. The quantity supplied is equal to quantity demanded at OQ\(_0\)

Correct Answer: B. 1950\(\Omega\)

Correct Answer: B. Marginal productivity of labour

Correct Answer: B. a movement from unemployment to full employment

Correct Answer: A. P2

Explanation

The monopolist can charge P2 price and still make profit as long as he covers his AVC. Any price below price P2, the monopoly will run at loss or shut down.

Correct Answer: B) individuals, firms and government

Explanation

This Economics question is about the three major agents of an economic system. An economic system refers to how a society organizes the production, distribution, and consumption of goods and services. The question is asking which three groups of people or entities are the most important in an economic system.

The options are: A) consumers, workers, and producers; B) individuals, firms, and government (which is the correct answer); C) politicians, bankers, and entrepreneurs; and D) consumers, producers, and government.

Consumers are people who buy goods and services. Workers are people who provide labor to produce goods and services. Producers are people or firms who create goods and services to sell to consumers.

Option B, which is the correct answer, includes individuals, firms, and government as the three major agents of an economic system. Individuals refer to people who participate in the economy as consumers or workers. Firms refer to businesses or producers who create goods and services. Government refers to the entity that sets rules and regulations, provides public goods and services, collects taxes, and manages the economy.

Option A includes three groups of people who are important in an economic system but not the most important agents. Option C and D are incorrect as they do not include the three most important agents of an economic system.

Understanding the major agents of an economic system is important because they interact with each other to determine how resources are allocated in the economy and how goods and services are produced and consumed.