A Friend of Yours Asks You Why Market Prices Are

question 94

Multiple Choice

A friend of yours asks you why market prices are better than government-determined prices. What do you say?

• A) Because they generally reflect the value of a good to society, but not the cost of making it.
• B) Because they generally reflect the cost to society of making a good, but not its value.
• C) Because they generally reflect both the value of a good to society and the cost of making it.
• D) Because they generally reflect neither the value of a good to society nor the cost of making it.

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Definitions:

Gravity

A fundamental force of nature by which all things with mass or energy are brought toward one another, including objects ranging from atoms to planets and galaxies.

Universal Causality

The principle that every event has a cause, suggesting a fundamental order to the universe and the predictability of phenomena.

Hume

A philosopher who contributed significantly to ethics, epistemology, and the philosophy of religion with his inquiry into human nature.

Billiard Balls

Often used in physics and philosophy as a metaphor or example to illustrate classical mechanics, causality, and the predictability of events under certain conditions.