If a Single Person Is Authorized to Both Order Goods

question 46

Multiple Choice

If a single person is authorized to both order goods and approve payments,the company may be defrauded in several ways.Which of the following scenarios would NOT be a possible consequence of this control weakness?

• A) The company may order goods priced above the current market price.
• B) The goods received may be damaged in shipment.
• C) The company may purchase more goods or higher quality goods than it needs.
• D) The company may purchase goods from a "related party" in order to enrich a relative of the company employee.

---

Definitions:

Monopolized Labor Market

A labor market where a single employer significantly controls the market for jobs and wages.

Equilibrium Wage

The wage rate that balances the quantity of labor supplied and the quantity of labor demanded in a labor market.

Marginal Product

The additional output generated by employing one more unit of a specific factor of production, holding other factors constant.

Optimal Labor Employment

The ideal quantity of labor that a firm employs where the marginal cost of hiring an additional worker equals the marginal revenue product.