Markets Are Usually Preferred by Economists for Efficient Transactions

question 6

Multiple Choice

Markets are usually preferred by economists for efficient transactions.However,Ronald Coase noted that administrative solutions may be superior because market transactions are:

• A)never achieved at the equilibrium price.
• B)not costless.
• C)always result in a price that clears the market.
• D)hindered by technological change.

---

Definitions:

Economic Impact

The effect of an event, policy, or market condition on the economy, which can be observed in changes to GDP, employment, or investment.

Price Floor

A government-imposed limit on how low a price can be charged for a product, typically above the equilibrium price to help producers.

Quantity Demanded

The total amount of a good or service that consumers are willing to purchase at a given price over a specified period.

Rationing Mechanism

A system or method used to distribute scarce resources or goods among consumers, often based on criteria other than price.