Question

One reason some manufacturing companies have moved production from overseas locations back to the United States is an increasing preference by U.S. consumers for products made in the United States. Assuming that managers at these companies used all available​ information, including the increased preference by U.S. consumers for domestically​ produced, when making the decision to move production back to the United States exemplifies which key economic​ idea?A.The market system relies on the principle of voluntary exchange.B.Optimal decisions are made at the margin.C.People are rational.D.People respond to economic incentives

Answer 1

Answer:

The key economic idea being exemplified is c) People are rational

Explanation:

The economists’ assumption is that firms and consumers utilize all available information to attain their goals and weigh all costs and benefits of each action taken. Moreover, firms and consumers only choose an action if the benefits exceeds the costs.  Therefore, the action of manufacturing firms to move their operations from overseas back to the US due to the increased preference for US manufactured goods exemplifies that consumers and firms rely on all available information when pursuing their goals.