Where People Think That No One Is Watching, They Will

question 48

Multiple Choice

Where people think that no one is watching, they will often shirk their responsibilities. This is known as

• A) moral hazard.
• B) conservative accounting.
• C) adverse selection.
• D) an inefficient marketplace.

---

Definitions:

Break Even

The moment when the sum of all expenses equals the sum of all revenues, eliminating any profit or loss.

Target Profit

The anticipated profit that a company aims to achieve within a specific period.

Selling Price

The amount a buyer pays to purchase a product or service from a seller.

Variable Expense

Costs that vary depending on a company's production volume or activity level.