In a Market System, Which of the Following Is a Major

question 79

Multiple Choice

In a market system, which of the following is a major benefit of making the firm's owners and investors exclusively shoulder the business risk?

• A)Those who deeply dislike business risk will not have anything to do with the business.
• B)This allows firms to more easily attract labor and other suppliers of inputs.
• C)This reduces the business risk in the economy.
• D)It makes it easier for the government to monitor and manage the business risk.

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Definitions:

Proprietary Income

Income generated from the ownership of proprietary technology, information, or processes that gives a firm a competitive advantage.

Government-sponsored Businesses

Enterprises that are initiated and sometimes funded by the government but are operated under private ownership or public-private partnership.

Public Utilities

Essential services provided by both government and private sectors including water, electricity, and transportation.

Efficiency Loss

The cost to society created by market inefficiency, often associated with the misallocation of resources or markets not reaching equilibrium.