The Term Market Mechanism Refers to

question 52

Multiple Choice

The term market mechanism refers to

• A)The use of market prices and sales to signal desired output.
• B)Resource allocation based on a production possibilities curve.
• C)Resource allocation based on consumer needs.
• D)Government laws and regulations concerning how the market should operate.

---

Definitions:

Reported Profits

The net income as stated in a company’s financial statements, reflecting revenues minus expenses, including taxes and cost of goods sold.

Investment Opportunities

Investment opportunities refer to financial situations or instruments that offer the potential for a return on investment.

Return On Investment

A metric for assessing the effectiveness or profit gained from an investment, determined by dividing the net income by the investment's cost.

Residual Income

The income that an investment or business generates after accounting for the cost of capital.