Markets Use Prices to Allocate Resources; Firms Use

question 16

Multiple Choice

Markets use prices to allocate resources; firms use:

• A) cost-price ratios.
• B) managers.
• C) the Board of Directors.
• D) random decisions.

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Definitions:

Legitimate Power

The authority or power that is recognized and accepted by others as right and proper due to the position or role of the person holding it.

Referent Power

A form of influence based on the leader's personal traits and the respect and admiration they inspire in others.

Human Capital

The skills, knowledge, and experience possessed by an individual or population, viewed in terms of their value or cost to an organization or country.

Stress

The emotional or physical strain experienced as a response to challenging or demanding situations, which can impact decision-making and performance.