CA Foundation Exam > CA Foundation Questions > Which of the following would be considered a ...
Start Learning for Free
Which of the following would be considered a disadvantage of allocating resources using a market system?
- a)Income will tend to be unevenly distributed.
- b)Significant unemployment may occur.
- c)It cannot prevent the wastage of scarce economic resources.
- d)Profits will tend to be low.
Correct answer is option 'A'. Can you explain this answer?
| FREE This question is part of | Download PDF Attempt this Test |
Most Upvoted Answer
Which of the following would be considered a disadvantage of allocatin...
Disadvantage of allocating resources using a market system:
Uneven distribution of income:
One of the main disadvantages of allocating resources using a market system is that income tends to be unevenly distributed. In a market system, individuals and firms are free to pursue their own self-interests, which can lead to significant differences in income levels. This is because some individuals and firms are more successful than others in the market, and they can earn a higher income as a result. As a result, income inequality can be a significant problem in a market system.
Other possible options:
While the correct answer is 'A', it is important to note that the other options may also have some validity as potential disadvantages of allocating resources using a market system. These include:
- Significant unemployment may occur: In a market system, firms are free to hire and fire workers as they see fit. While this can lead to greater efficiency and productivity, it can also result in significant unemployment if firms are not able to find enough customers to support their businesses.
- It cannot prevent the wastage of scarce economic resources: In a market system, resources are allocated based on supply and demand. While this can be an efficient way to allocate resources, it may not always lead to the most sustainable use of resources. For example, if a certain resource is in high demand but is also scarce, the market may allocate too much of that resource to certain industries, leading to depletion of the resource over time.
- Profits will tend to be low: In a competitive market, firms may be forced to lower their prices in order to attract customers. While this can be good for consumers, it can also lead to lower profits for firms, which may discourage them from investing in new products or technologies.
Uneven distribution of income:
One of the main disadvantages of allocating resources using a market system is that income tends to be unevenly distributed. In a market system, individuals and firms are free to pursue their own self-interests, which can lead to significant differences in income levels. This is because some individuals and firms are more successful than others in the market, and they can earn a higher income as a result. As a result, income inequality can be a significant problem in a market system.
Other possible options:
While the correct answer is 'A', it is important to note that the other options may also have some validity as potential disadvantages of allocating resources using a market system. These include:
- Significant unemployment may occur: In a market system, firms are free to hire and fire workers as they see fit. While this can lead to greater efficiency and productivity, it can also result in significant unemployment if firms are not able to find enough customers to support their businesses.
- It cannot prevent the wastage of scarce economic resources: In a market system, resources are allocated based on supply and demand. While this can be an efficient way to allocate resources, it may not always lead to the most sustainable use of resources. For example, if a certain resource is in high demand but is also scarce, the market may allocate too much of that resource to certain industries, leading to depletion of the resource over time.
- Profits will tend to be low: In a competitive market, firms may be forced to lower their prices in order to attract customers. While this can be good for consumers, it can also lead to lower profits for firms, which may discourage them from investing in new products or technologies.
Free Test
FREE
| Start Free Test |
Community Answer
Which of the following would be considered a disadvantage of allocatin...
If all the resources are allocated to capital economy then it would be beneficial for rich people because producers will produce those products which gave them high profits.. consequently poorer section will be more ignore and the gulf between them will be more huge..
Attention CA Foundation Students!
To make sure you are not studying endlessly, EduRev has designed CA Foundation study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in CA Foundation.
|
Explore Courses for CA Foundation exam
|
|
Similar CA Foundation Doubts
Top Courses for CA FoundationView all
Which of the following would be considered a disadvantage of allocating resources using a market system?a)Income will tend to be unevenly distributed.b)Significant unemployment may occur.c)It cannot prevent the wastage of scarce economic resources.d)Profits will tend to be low.Correct answer is option 'A'. Can you explain this answer?
Question Description
Which of the following would be considered a disadvantage of allocating resources using a market system?a)Income will tend to be unevenly distributed.b)Significant unemployment may occur.c)It cannot prevent the wastage of scarce economic resources.d)Profits will tend to be low.Correct answer is option 'A'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Which of the following would be considered a disadvantage of allocating resources using a market system?a)Income will tend to be unevenly distributed.b)Significant unemployment may occur.c)It cannot prevent the wastage of scarce economic resources.d)Profits will tend to be low.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following would be considered a disadvantage of allocating resources using a market system?a)Income will tend to be unevenly distributed.b)Significant unemployment may occur.c)It cannot prevent the wastage of scarce economic resources.d)Profits will tend to be low.Correct answer is option 'A'. Can you explain this answer?.
Which of the following would be considered a disadvantage of allocating resources using a market system?a)Income will tend to be unevenly distributed.b)Significant unemployment may occur.c)It cannot prevent the wastage of scarce economic resources.d)Profits will tend to be low.Correct answer is option 'A'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Which of the following would be considered a disadvantage of allocating resources using a market system?a)Income will tend to be unevenly distributed.b)Significant unemployment may occur.c)It cannot prevent the wastage of scarce economic resources.d)Profits will tend to be low.Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following would be considered a disadvantage of allocating resources using a market system?a)Income will tend to be unevenly distributed.b)Significant unemployment may occur.c)It cannot prevent the wastage of scarce economic resources.d)Profits will tend to be low.Correct answer is option 'A'. Can you explain this answer?.
Solutions for Which of the following would be considered a disadvantage of allocating resources using a market system?a)Income will tend to be unevenly distributed.b)Significant unemployment may occur.c)It cannot prevent the wastage of scarce economic resources.d)Profits will tend to be low.Correct answer is option 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
Download more important topics, notes, lectures and mock test series for CA Foundation Exam by signing up for free.
Here you can find the meaning of Which of the following would be considered a disadvantage of allocating resources using a market system?a)Income will tend to be unevenly distributed.b)Significant unemployment may occur.c)It cannot prevent the wastage of scarce economic resources.d)Profits will tend to be low.Correct answer is option 'A'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
Which of the following would be considered a disadvantage of allocating resources using a market system?a)Income will tend to be unevenly distributed.b)Significant unemployment may occur.c)It cannot prevent the wastage of scarce economic resources.d)Profits will tend to be low.Correct answer is option 'A'. Can you explain this answer?, a detailed solution for Which of the following would be considered a disadvantage of allocating resources using a market system?a)Income will tend to be unevenly distributed.b)Significant unemployment may occur.c)It cannot prevent the wastage of scarce economic resources.d)Profits will tend to be low.Correct answer is option 'A'. Can you explain this answer? has been provided alongside types of Which of the following would be considered a disadvantage of allocating resources using a market system?a)Income will tend to be unevenly distributed.b)Significant unemployment may occur.c)It cannot prevent the wastage of scarce economic resources.d)Profits will tend to be low.Correct answer is option 'A'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice Which of the following would be considered a disadvantage of allocating resources using a market system?a)Income will tend to be unevenly distributed.b)Significant unemployment may occur.c)It cannot prevent the wastage of scarce economic resources.d)Profits will tend to be low.Correct answer is option 'A'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
|
|
Explore Courses for CA Foundation exam
|
|
Suggested Free Tests
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
Follow Us
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup