Author Question: If market prices help inform individuals about the relative scarcities of goods and services, then ... (Read 71 times)

ssal · **on:** Jun 29, 2018

If market prices help inform individuals about the relative scarcities of goods and services, then abolishing market prices would

A) finally allow people to overcome scarcity.
B) eliminate important information.
C) abolish the dog-eat-dog mentality of market competition.
D) tend to create permanent surpluses of most goods.
E) accomplish all of the above.

Question 2

Suppose shoppers typically pay twice as much for frozen convenience foods compared to similar dinners they could prepare themselves. An economist would say

A) the purchase is inefficient because the consumer doesn't really need to pay twice as much for essentially the same dinner.
B) the purchase is inefficient because the frozen dinner is of even lower quality than the homemade dinner, yet twice as expensive.
C) the purchase is efficient if the consumer feels the savings in preparation time justifies the higher price.
D) the purchase is efficient, but the consumer is still probably behaving irrationally.