How Does a Market System Prevent People from Getting as Many

question 196

Multiple Choice

How does a market system prevent people from getting as many goods and services as they wish?

• A)Governments interfere with the market mechanism to influence the allocation of goods and services.
• B)In a market system,firms can charge any price they want,thus preventing poor people from getting as many goods and services as they wish.
• C)The market system allocates goods and services to those who are able to pay for those products and therefore income is a limiting factor.
• D)The government imposes taxes on those who earn beyond a certain amount of income.

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Definitions:

Shares Outstanding

Shares outstanding refer to all shares currently owned by shareholders, including restricted shares owned by company insiders and share blocks held by institutional investors.

Common Stock

A form of corporate equity ownership, a type of security that represents ownership in a corporation and gives holders voting rights and a share in the company's profits via dividends.

Paid-In Capital

Funds that shareholders contribute to a company in exchange for equity, beyond the par value of the shares.

Par Value

The face value of a stock or bond as stated by the issuing company, which does not necessarily reflect its market value.