Which of the Following Is NOT True? When a Liability

question 22

Multiple Choice

Which of the following is NOT true? When a liability increases:

• A) cash may increase.
• B) revenue may increase.
• C) another liability may decrease.
• D) expenses may increase.

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Definitions:

Government Failure

Occurs when the government becomes the tool of the rent seeker and the allocation of resources is made even less efficient by the intervention of government.

Profit-maximizing Number

The output level at which a firm achieves the highest possible profit, where marginal cost equals marginal revenue.

Rent Seeker

An individual or entity that seeks to increase their share of existing wealth without creating new wealth, often through manipulation of the economic environment.

Public Choice Theory

A framework that analyzes how public decisions are made, focusing on the behavior and interests of voters, politicians, and bureaucrats.