Which Statements Are TRUE

question 38

Multiple Choice

Which statements are TRUE?
I. The price system solves the information problem by telling us the highest-valued uses for a product.
II. The price system solves the incentive problem by giving consumers an incentive to seek out substitutes when the price of a product rises.
III. The price system solves the social-equity problem by making most products affordable to middle-class households.

• A) I, II, and III
• B) II and III only
• C) I and II only
• D) II only

---

Definitions:

Placebo Effect

A phenomenon in which a person experiences a perceived improvement in condition due to personal expectations, rather than the treatment itself having any therapeutic effect.

Antidepressants

Medications prescribed to alleviate symptoms of depression by adjusting the balance of neurotransmitters in the brain.

Autism

A neurodevelopmental disorder characterized by challenges with social interaction, communication, and by restrictive and repetitive behaviors.

Biological Origins

The roots or beginnings of life in terms of biology, including the genetic and evolutionary aspects that have shaped the development of living organisms.