The Problem of Scarce Resources

question 153

Multiple Choice

The problem of scarce resources:

• A) can be solved in a market economy, but not in a command economy.
• B) can be solved if all resources are jointly owned by the public and private sectors.
• C) implies that the resources are not freely available.
• D) arises because all natural resources are owned by the government in every country.
• E) can be solved by lowering taxes in an economy.

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Definitions:

Endowment Fund

A fund established to finance a particular purpose of an organization, where the principal is kept intact while the investment income is available for use.

Deferral Method

An accounting technique used to delay the recognition of expenses or revenues until the related cash is paid or received.

Financial Statements

Written records that convey the business activities and the financial performance of a company. They typically include the balance sheet, income statement, and statement of cash flows.

Restricted Donations

Donations given to an organization with specific conditions attached regarding how the funds can be used, often designated for a particular purpose or project.