Situations Where the Market Does Not Work Efficiently or Does

question 75

Multiple Choice

Situations where the market does not work efficiently or does not allocate resources to their highest valued uses are called

• A) unnatural monopolies.
• B) moral hazards.
• C) adverse selections.
• D) market failures.
• E) most-favored customers.

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Definitions:

Assets

Resources owned by a person or business that have economic value or expected future benefit.

Liabilities

Financial obligations or debts owed by a person or company to others.

Taxation Principle

The guidelines governing how taxes should be levied on individuals and businesses in a fair and efficient manner.

Tax Revenue

The income that is gained by governments through taxation from individuals and businesses.