Markets Are Advantageous Over Central Planning as Methods Ofresource Allocation

question 89

Multiple Choice

Markets are advantageous over central planning as methods ofresource allocation because:

• A)resources travel to their highest value uses.(True Answer )Correct
• B)resources are allocated equally across all uses.
• C)resources are distributed to those goods that have a larger number of substitutes.
• D)central planners have never been shown to correctly identify high value uses of products.

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Definitions:

Venture Exchange

A marketplace meant for trading the stocks and securities of smaller or emerging companies.

Agency Problem

A conflict of interest inherent in any relationship where one party is expected to act in another's best interests, such as between shareholders (principals) and company executives (agents).

Stockholders

Individuals or entities that own shares in a corporation, giving them an ownership stake.

Firm's Managers

Individuals responsible for making significant corporate decisions and managing the overall operations and resources of a business.