_____ in the Marketplace Are a Rough Measure of How

question 183

Multiple Choice

_____ in the marketplace are a rough measure of how society values particular goods and services.

• A) Inventories
• B) Prices
• C) Cost of labor and materials
• D) The number of producers
• E) Discrepancies of quantity

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Definitions:

Coase Theorem

An economic theory that suggests that if trade in an externality is possible and there are no transaction costs, parties can negotiate solutions to conflict that lead to an efficient outcome regardless of the initial allocation of property.

Externalities

Economic side effects or by-products that affect an uninvolved third party; can be positive or negative.

Pollution Abatement

Measures and processes undertaken to reduce, control, or eliminate pollution from various sources.

Optimal Amount

The quantity of a good or service that yields the highest utility or benefits under specific conditions.