A Situation in Which a Market Left on Its Own

question 32

Multiple Choice

A situation in which a market left on its own fails to allocate resources efficiently is known as:

• A)scarcity
• B)opportunity cost
• C)market failure
• D)market power

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Definitions:

Fair Value

The estimated market price of an asset or liability, based on current conditions and the willing buyer-seller principle.

Capital

The owner’s investment of equity in the company.

Debit

The left-hand side of any account. A number entered on the left side of any account is said to be debited to an account.

Credit

The right-hand side of any account. A number entered on the right side of any account is said to be credited to an account.