Which of the Following Statements Is Correct

question 162

Multiple Choice

Which of the following statements is correct?

• A)If the buyer of a good gains, the seller must lose an equal amount.
• B)The value of goods is objective; it is equal to the cost of supplying the good.
• C)Opportunity costs will always be incurred when scarce resources are used to produce a good.
• D)Changes in incentives generally have no effect on human behavior.

---

Definitions:

Equity Method

A financial recording method where investments in other firms are initially noted at their purchase price and later updated to represent the investor's portion of the investee's profits or losses.

Fair-Value Method

An accounting approach where assets and liabilities are recorded at their current market values rather than their original cost.

Goodwill

An intangible asset arising when a company acquires another for a price higher than the fair market value of its net assets.

Other Comprehensive Income

Income that includes all changes in equity during a period except those resulting from investments by owners and distributions to owners.