In a market-based economy, what is the role of a system of prices?
A. To create abundance and surpluses
B. To make goods and services too expensive.
C. To address the problem of scarcity
D. To create shortages
Answer: C. To address the problem of scarcity
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Consider a market in which high-quality and low-quality television sets are sold. Before consumers make a purchase, they do not know the quality of the sets, but the sellers do know
As compared to a situation where both consumers and sellers know the quality of the sets, this situation would A) cause no change in the ratio of low to high-quality sets sold. B) increase the fraction of high-quality sets sold. C) increase the fraction of low-quality sets sold. D) cause the average price of goods sold to rise.
Household production still exists because it often requires fewer specialized resources than market production does
a. True b. False