The Market Solves the Incentive Problem When Allocating Resources Because

question 185

Multiple Choice

The market solves the incentive problem when allocating resources because the:

• A) consumers will pay for the good only if its price is greater than the value of use.
• B) consumers will pay for the good only if its value of use is greater than the price.
• C) suppliers will produce the good only if its cost is less than the value of use.
• D) suppliers will produce the good only if its value of use is less than the cost.

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Definitions:

Special Revenue Fund

A fund used by governments to account for revenue sources that are restricted or committed to expenditure for specified purposes other than debt service or capital projects.

Decrease in Financial Resources

A reduction in the amount of money, assets, or other financial means available to an individual or organization.

General Fund

A central and primary operating fund of a government, covering general operating expenses and services.

Accounting Records

Documentation and books that record all of the financial transactions of a business.