Which of the Following Statements About the Way Markets Allocate

question 8

Multiple Choice

Which of the following statements about the way markets allocate resources is most accurate from society's perspective?

• A) The market always allocates resources in the best way.
• B)
• The market may not always allocate resources in a way that is not in society's best interest.
• C) Resource allocation by markets may not be perfect, but it is always better than government allocation of resources.
• D) Markets always fail to allocate resources properly, so we must rely on the government to determine the

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Definitions:

Expected Cash Collections

An estimate of the amount of money a company anticipates receiving from its customers over a certain period, based on sales forecasts and credit policies.

Ending Finished Goods Inventory

The value of goods that have been completed but not yet sold at the end of an accounting period.

Ending Raw Materials Inventory

The value of raw materials that remain unsold and available for use at the end of an accounting period.

Expected Cash Collections

The amount of cash a company anticipates receiving over a specified period, often based on sales forecasts.