Under a Pure Price System, the Decision of Resource Allocation

question 62

Multiple Choice

Under a pure price system, the decision of resource allocation is made by

• A)the head of the government.
• B)a queen or king.
• C)individuals who own the resources.
• D)no one.

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Definitions:

Net Present Value

An approach used in capital budgeting to determine the profitability of an investment or project by calculating the difference between the present value of cash inflows and the present value of cash outflows over a period of time.

Salvage Value

The predicted worth of an asset upon reaching the end of its service life.

Discount Rate

The discount rate applied to calculate the present value of future cash flows.

Automated Equipment

Machinery that operates with minimal human intervention, often used to increase efficiency and consistency in production.