Which of the Following Statements Would a Follower of Adam

question 70

Multiple Choice

Which of the following statements would a follower of Adam Smith be most likely to make?

• A)Market economies are flawed because they put too much emphasis on economic growth and not enough on environmental problems.
• B)The federal government should use its ability to spend and tax to guide the decisions of businesses and consumers.
• C)If people are given the freedom to follow their own interests,they will end up promoting economic growth that benefits society as a whole.
• D)Overpopulation is the main danger confronting modern economies.

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Definitions:

Margin Of Safety Percentage

A financial ratio that measures the difference between actual or projected sales and the break-even point, expressed as a percentage of sales.

Contribution Margin

The amount remaining from sales revenue after variable production costs are deducted, contributing to covering fixed costs and generating profit.

High-Low Method

A technique used in accounting to estimate variable and fixed costs based on the highest and lowest levels of activity.

Mixed Cost

A cost that contains both variable and fixed cost elements, making its total cost vary with changes in activity, but not proportionately.