Government Intervention in the Market Is Helpful When

question 96

Multiple Choice

Government intervention in the market is helpful when

• A) consumers are free to buy from a number of different firms.
• B) consumers and firms have good information.
• C) firms face increasing competition from new entrants into the market.
• D) firms engage in production activities that pollute the air and water.

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Definitions:

Proprietorship

A business structure owned by a single individual, where the owner is entitled to all profits and responsible for all debts and liabilities.

Business Entity Assumption

An accounting principle that treats a business as an entity separate from its owners, meaning its financial transactions are recorded distinctly from those of its owners or other businesses.

Economic Unit

An entity, such as an individual, household, or organization, considered in economic analysis and decision-making.

FASB

Financial Accounting Standards Board, an organization responsible for establishing accounting and financial reporting standards in the U.S.