Relative to the Prices That Would Be Observed in an Uncontrolled

question 173

Multiple Choice

Relative to the prices that would be observed in an uncontrolled market, prices charged in a black market are generally

• A)lower, since sellers have trouble locating buyers.
• B)lower, since buyers have trouble locating sellers.
• C)higher, since black market sellers compensate for the risk of being caught.
• D)higher, since most buyers enjoy goods more if they are illegal.

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Definitions:

Communist Central Planning

A system where the government makes all decisions about the production and allocation of goods and services in an economy.

Personal Gain

The benefit or advantage one receives or aims to receive from an action or investment, often measured in terms of financial or personal satisfaction.

Market System

A system of economics where the choices about investment, production, and distribution rely on the principles of supply and demand, and the pricing of goods and services is established freely in the market.

Business Risk

The potential for losses or less than expected returns stemming from the operational aspects of a business.