Which of the Following Statements Best Characterizes a Basic Difference

question 29

Multiple Choice

Which of the following statements best characterizes a basic difference between market economies and centrally planned economies?

• A)Society relies more upon prices to allocate resources when the economy is centrally-planned than when it is market-based.
• B)The self-interest of households is reflected more fully in the outcome of a centrally-planned economy than in the outcome of a market economy.
• C)Government plays a larger role in the economic affairs of a market economy than in the economic affairs of a centrally planned economy.
• D)None of the above are correct.

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Definitions:

Value-Added Ratio

The ratio of the value-added lead time to the total lead time.

External Failure Cost

Costs incurred when products or services fail to meet quality standards after being delivered to the customer, including returns, repairs, and lost sales.

External Failure Cost

External failure costs are expenses incurred when products or services fail to meet quality standards after being delivered to the customer, including returns, repairs, and lost sales.

Value-Added

The enhancement a company gives its product or service before offering the product to customers, increasing its value.