An act of production, as economists use the term, is demonstrated by which of the following?
A) A worker places money in a pension fund.
B) A local nonprofessional theater company performs a play.
C) An individual buys municipal bonds to avoid taxes.
D) A firm buys a pre-existing building in order to expand its operations.

Question

Quizplus · Accepted Answer

Production, in economic terms, involves creating goods or services. The local nonprofessional theater company performing a play is an example of producing a service, which is entertainment in this case. The other options involve financial transactions or investments, not the creation of goods or services.

An Act of Production, as Economists Use the Term, Is