The Rationing Function of Prices Refers to

question 54

Multiple Choice

The rationing function of prices refers to

• A) the situation when government must intervene in a market when there is a large shortage or surplus.
• B) the synchronization of decisions by buyers and sellers that leads to an equilibrium.
• C) the synchronization of decisions by buyers and sellers through the direction of government agencies.
• D) the situation when only the rich get the goods they want.

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Definitions:

Output

The overall production of goods or services by an organization, industry, or economic body.

Economic Profit

The gap between all earnings and total expenditures, factoring in both overt and hidden costs.

Accounting Profit

The total revenue of a business minus the explicit costs associated with that business, as calculated for financial accounting and reporting purposes.

Explicit Costs

Direct, out-of-pocket payments made by businesses for resources and services.