Question

Which activity is performed by firms while facing risk and uncertainty?

Options

• Frames and enforces laws, delivers justice, and collects taxes

• Sells goods to the rest of the world and buys goods from other countries

• Single individuals or groups consume goods and services and save part of their income

• Entrepreneurs hire wage labour, use land and capital, produce goods and services and sell them for profit

Answer 1

Firms hire wage labour and use land and capital to produce goods and services. They sell these goods and services for profit while facing risk and uncertainty.