Which Statement Explains Why Many Economists Have Often Compared the Functioning

question 198

Multiple Choice

Which statement explains why many economists have often compared the functioning of worldwide markets to the functioning of a computer?

• A) Worldwide markets can allocate resources randomly just as a computer can generate random data.
• B) Without the use of computers, markets cannot solve the information problem of resource use.
• C) Without the use of computers, markets cannot solve the allocation problem of resource use.
• D) Worldwide markets can solve very large resource-allocation problems by simply using the price signal mechanism.

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Definitions:

Random Assignment

A method used in experiments to evenly distribute participants across various experimental conditions, minimizing biases and ensuring statistical validity.

Generalizable

The extent to which findings from a study or research can be applied to larger populations or different contexts beyond the original subjects.

Internally Valid

The degree to which the results of an experiment can be attributed to the manipulation of the independent variable rather than other factors.

Laboratory Conditions

Refers to a controlled environment where experiments are conducted, allowing for precise manipulation and measurement of variables.