Question: Which Best Explains Why The Profit Motive Often Leads To Efficiency And Innovation?

How free choice is protected in a free market?

Consumer decisions affect producers, and producer decisions affect consumers.

Which best explains how free choice is protected in a free-market system.

– Consumers and producers protect their own freedom by making economic decisions.

– The government makes and enforces whatever laws are needed to guarantee free choice..

What are the two main purposes of all businesses?

“Because the purpose of business is to create a customer, the business enterprise has two–and only two–basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.”

What are the 3 main purposes of a business plan?

What is the purpose of a Business Plan? ✓ The purpose of a Business Plan is to identify, describe and analyze a business opportunity and/or a business already under way, examining its technical, economic and financial feasibility.

Which group of players make all of the economic decisions in a free market system?

One of the most important characteristics of a market economy, also called a free enterprise economy, is the role of a limited government. Most economic decisions are made by buyers and sellers, not the government. A competitive market economy promotes the efficient use of its resources.

Which best describes what labor directly contributes to production?

Which best describes what labor directly contributes to production? Human effort and ideas drive production.

Which best explains why not all goals in economics can be met?

Which best explains why not all goals in economics can be met? Some goals are incompatible with each other. Which explains why scarcity cannot be eliminated? No matter how much is produced, people will always want more.

Is profit a good motivation for business?

Profit is the basic motivation for any business, but it has to be tempered with humanity, respect and ethics. There’s a real danger for allowing businesses to run purely based on the idea that more is better.

How profit is the main objective for a business?

The profit objective is easy to measure and is achieved when you have more income than costs . Most private sector businesses have this as their main objective. Profit maximisation is a variation of the profit objective. This is when an organisation aims to make as much profit as possible.

What are the 4 main business objectives?

Objectives of Business – 4 Important Objectives: Economic, Human, Organic and Social ObjectivesEconomic Objectives: Essentially a business is an economic activity. … Human Objectives: Human objectives are connected with employees and customers. … Organic Objectives: … Social Objectives:

Why scarcity is a basic fact of life?

If you look around carefully, you will see that scarcity is a fact of life. Scarcity means that human wants for goods, services and resources exceed what is available. Resources, such as labor, tools, land, and raw materials are necessary to produce the goods and services we want but they exist in limited supply.

What improvement did the shipping container bring?

The arrival of containers and intermodalism revolutionized the shipping industry. Containers could be efficiently stacked, allowing more and more goods to be transported across the seas. Labor costs were dramatically lowered and, since containers were sealed, theft was reduced.

Which best explains why the free market system follows a circular flow model?

Which best explains why the free-market system follows a circular-flow model? Free choices made by consumers and producers influence each other.

What is the main motive of business?

Profit Maximization According to economist Milton Friedman, the main purpose of a business is to maximize profits for its owners, and in the case of a publicly-traded company, the stockholders are its owners.

Why is profit motive important to entrepreneurs?

In a capitalist economy, profit plays an important role in creating incentives for business and entrepreneurs. For an incumbent firm, the reward of higher profit will encourage them to try and cut costs and develop new products. If an industry is profitable, it will encourage new firms to enter.

Which best explains why competition is an important part of a free market system?

Which best explains why competition is an important part of a free-market system? Without competition, people wouldn’t have a lot of choices. … Individuals need to own resources in order to make free choices.

Which of the following explains why scarcity Cannot be eliminated?

Answer Expert Verified Scarcity cannot be eliminated because no matter how much is produced, people will always want more.

What best explains the profit motive?

The profit motive is the desire to make money. In a free market (where people voluntarily swap money, goods and services), the profit motive decides who gets what. In theory, the profit motive distributes resources efficiently, but in practice there are some problems.

Is business just about making money?

Business is a deeply human institution, but its purpose is not to make as much money as possible. The purpose is something else. … If you think that too many executives just concentrate on profits and money, then start a business that focuses on a purpose more than profits and relies on the passion of its employees.

Which best explains why improvements in communication technology allow people to make better economic decisions?

Which best explains why improvements in communication technology allow people to make better economic decisions? Better communication makes it easier to get the information needed to come to a well-informed decision.

Why economics is a study of allocation?

Economics is the study of the allocation of scarce resources. We have infinite desires and wants and only some limited amount of resources to satisfy them. We therefore wish to optimise the production from those scarce resources. … At which point we need to know which resources are scarce of course.

Which is one way land contributes to production?

Which is one way that land contributes to production? Energy from the enviorment fuels production.