Competitive Markets Usually Promote the Efficient Use of Resources

question 33

Multiple Choice

Competitive markets usually promote the efficient use of resources. This is because:

• A) resource owners bear the wealth effects of their decisions.
• B) managers always have the proper incentives to make decisions.
• C) consumers usually provide the lists of corporate mistakes.
• D) markets usually make equitable choices first.

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Definitions:

Budgeting

A process of creating a plan to spend your money, outlining projected income and expenses over a period.

Spending Variances

The difference between the actual amount spent and the budgeted amount for a particular accounting category.

Favorable

A term used in finance and accounting indicating that actual performance is better than the expected or budgeted performance.

Unfavorable

A term used in budgeting and accounting to describe a financial condition or variance that is worse than expected or budgeted.