When Economic Resources Are Devoted to Transferring Wealth from One

question 53

Multiple Choice

When economic resources are devoted to transferring wealth from one sector of the economy to another rather than being used for productive purposes,the process is known as:

• A)rent seeking.
• B)logrolling.
• C)central planning.
• D)negative externalities.
• E)deficit financing.

Recognizing the importance of accurately estimating project cash flows and the challenges involved.

Differentiating between cash flow and accounting income in capital budgeting decisions.

Identifying the importance of considering risk and how it is accounted for in project evaluation.

Distinguishing between sunk costs and relevant costs in project evaluation.

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Definitions:

Price Elasticity

An economic concept indicating the responsiveness of the quantity demanded of a product to changes in its price, with high elasticity indicating greater sensitivity.

Foreign Travel

The activity of traveling outside one's home country for leisure, business, or other purposes.

Quantity Demanded

The amount of a good or service consumers are willing and able to purchase at a given price.

Price Elasticity

A gauge of the reaction in the quantity of a good sought after to adjustments in its price level.