Author Question: In its most ideal form, a price system allows A) firms to act in such a way that they eliminate ... (Read 55 times)

clippers! · **on:** Jun 29, 2018

In its most ideal form, a price system allows

A) firms to act in such a way that they eliminate scarcity.
B) consumers to satisfy all their wants.
C) resources to move from lower-valued uses to higher-valued uses through voluntary exchange.
D) government policy makers to allocate resources to the uses which they consider to be in the best interests of society.

Question 2

Distinguish between a command-and-control economic system and a price system.

What will be an ideal response?

amit · **Reply #1 on:** Jun 29, 2018

Answer to Question 1

C

Answer to Question 2

In a command-and-control economic system, economic decisions about resource allocation are made by a central authority, such as a central government or a king or queen. Under command and control, this central authority decides what items will be produced, how will the items be produced, and who will obtain those items. In a price or market system, the what, how and for whom issues are determined via decentralized decision making among buyers and sellers in the market.