Which of the Following Statements Is Not Correct

question 4

Multiple Choice

Which of the following statements is not correct?

• A)An invisible hand leads buyers and sellers to an equilibrium that maximizes total surplus.
• B)Market power can cause markets to be inefficient.
• C)Externalities can cause markets to be inefficient.
• D)The invisible hand can remedy all types of market failures.

---

Definitions:

Cost Flow Method

An accounting technique used to value inventory and determine the cost of goods sold by assuming a flow of costs.

FOB Shipping Point

A shipping term indicating that the buyer takes responsibility for goods and their transportation costs as soon as the goods leave the seller's premises.

Goods In Transit

Merchandise or stock that has been shipped by the seller but has not yet been received by the purchaser.

FIFO Method

"First In, First Out," an inventory valuation method assuming goods first purchased or produced are the first to be sold.