Markets Can Fail to Achieve Efficiency When

question 6

Multiple Choice

Markets can fail to achieve efficiency when

• A)there are prices consumers do not think are fair.
• B)there are wages workers do not think are fair.
• C)trade puts people out of work.
• D)there are buyers or sellers without adequate information about the quality of goods.

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Definitions:

Times Interest Earned Ratio

A financial metric assessing a company’s ability to meet its interest obligations from its operating income.

Income Tax Payments

Income tax payments are the amounts of money a company or individual must pay to the government, based on the income earned over a tax period.

Interest Expense

The cost incurred by an entity for borrowed funds, reflecting the interest payments on debts.

Debt-To-Equity Ratio

The debt-to-equity ratio is a measure of financial leverage, indicating the proportion of company financing that comes from creditors and investors, calculated as total liabilities divided by shareholders' equity.