Examlex

Solved

Which of the Following Statements About a Price System Is

question 331

Multiple Choice

Which of the following statements about a price system is true? I. Prices ration goods and services.
II) Prices indicate relative scarcity.


Definitions:

Substitution Effect

The change in consumption that occurs when a price change for one good causes a consumer to replace that good with a more or less expensive substitute.

Price Change

An alteration in the cost of goods or services in the market.

Income

The amount of money received by an individual or entity, usually in exchange for labor or services, or through returns on investments.

Utility Function

A mathematical representation in economics that quantifies the satisfaction or happiness derived by a consumer from consuming goods and services.

Related Questions