Which Statements Are TRUE

question 38

Multiple Choice

Which statements are TRUE?
I. The price system solves the information problem by telling us the highest-valued uses for a product.
II. The price system solves the incentive problem by giving consumers an incentive to seek out substitutes when the price of a product rises.
III. The price system solves the social-equity problem by making most products affordable to middle-class households.

• A) I, II, and III
• B) II and III only
• C) I and II only
• D) II only

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Definitions:

Equal Chance

The principle or condition of having the same opportunities or possibilities as others, without discrimination or bias.

Experimental Research

A research methodology that involves manipulating one or more variables to determine their effect on a certain outcome, allowing for cause-and-effect inferences.

Independent Variable

In experimental and research settings, it is the variable that is manipulated or changed to observe its effects on a dependent variable.

Dependent Variable

The variable in an experiment that is expected to change in response to manipulations of the independent variable.