Mr. Smith wants to buy a house in a certain neighborhood that he ...

[APUS57]

Mr. Smith wants to buy a house in a certain neighborhood that he thinks is ideal for an elderly, single man like himself.
 
  However, before buying the house, he consults his friend who lives in the same neighborhood and thinks that it is the ideal place for him. This is an example of a(n) ________. A) confirmation bias
  B) attenuation bias
  C) attentional bias
  D) distinction bias

Question 2

How do markets provide for an efficient allocation of scarce resources?
 
  What will be an ideal response?

[abctaiwan]

Answer to Question 1

A

Answer to Question 2

The market prices of the various products, as determined by the market forces, provide incentives that implicitly allocate economic resources. The market allows the optimizing buyers and sellers to freely negotiate the prices of various goods and services. For example, in the market for apartments, optimizing landlords and optimizing renters can freely negotiate the rental price of an apartment. These market prices then provide incentives that allow for efficient allocation of scarce resources. This allocation mechanism implies, for example, that mostly highly-paid workersand others with a high opportunity cost of timetend to rent the apartments with the best locations.

[APUS57]

Thank you

[abctaiwan]

No problemo