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:

Financial Statements

Official records that detail a company's financial status, including balance sheets, income statements, and cash flow statements.

Statement Of Financial Position

Also known as a balance sheet, it is a financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time, providing a snapshot of its financial health.

Non-Financial Assets

Assets not in monetary form, such as property, plant, equipment, intangible assets, and inventories, which are expected to provide economic benefit beyond the current financial year.

Financial Assets

Assets that derive value from a contractual claim, such as cash, stocks, bonds, and bank deposits.