Blinded
Something based on random choice or personal whim, rather than any reason or system.
What is arbitrary?
Based on reason or logic; the opposite of arbitrary.
What is rational?
Something you buy today in order to generate profit in the future.
What is an investment?
The two things that best inform us what are the most helpful products to produce.
What are prices and profits?
The highest level of output over a given period of time.
What is maximum output?
Without these, production decisions must be arbitrary and based on either personal whim or random selection.
What are the prices?
Prices emerge from this process.
What is price discovery?
The simplest and most common way to evaluate an investment.
What is payback?
In order to maximize profits, one must provide the highest possible benefit to this person.
Who is the consumer?
Prices affect profits as well as ____ ultimately.
What are investments?
The cost of the action you did NOT take.
What is opportunity cost?
Profit signals come from these.
What are prices?
If prices are distorted these decisions will also be distorted.
What are production decisions?
This is the best guide to serving consumer preferences.
What is market price?
Businesses make investment decisions by comparing the size of the investment to ____.
What is the profit produced?
The amount of investment divided by the annual benefit derived from the investment.
What is payback?
This reflects all known information about a product.
What is market price?
Without these signals it is impossible to know the best way to run your factory.
What are profit signals?
Market Price and profit are two mechanisms of this concept that was introduced by Adam Smith.
What is the invisible hand?
The point of ____ is to be sure that you have taken into account ALL the impacts of a given decision.
What is opportunity cost?