The Figure Given Below Represents the PPC in Two Nations

question 68

Multiple Choice

The figure given below represents the PPC in two nations - Germany and Korea, producing only two goods, cars and food.Figure 2.4

-Given that resources can be allocated by the government, the market, a random process, or on a first-come first-serve basis, which of the following statements is true?

• A)The market system is not entirely fair but it creates incentives to increase supplies and improve standards of living.
• B)The random process of allocation allows individuals to acquire purchasing power and enhances the value of the resources that they own.
• C)Since the government system does not distinguish between those who have income and those that do not, government allocation of resources is the most efficient.
• D)There will be no shortages under the first-come first-serve basis of allocation.
• E)A random process of allocation is fair in the sense that everyone gains and there are no losers.

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Definitions:

Capacity To Control

Refers to the ability of an entity to direct the financial and operating policies of another entity so as to benefit from its activities.

Acquiring Entity

A company or individual that purchases or obtains control of another company or asset.

Voting Rights

The rights of shareholders to vote on company matters, such as the election of the board of directors or approval of significant corporate actions.