Which of the following is not a function of prices in a market system?


1. Which of the following is not a function of prices in a market economy? a. b. c. d. To allocate goods to the consumers who
5. a. Assuming the Laws of Demand and Supply hold, a surplus occurs when: The amount of a good that all potential consumers a

Answer

1. Option D is the right answer. All the choices present in the options are the function of prices in a market economy.

2. Option C is the right answer. The central problem of economics is to allocate scarce resources to unlimited wants.

3. Option B is the right answer. The opportunity cost is the cost to choose one alternative over the cost of the next highest-paid available alternative. The 1st alternative which is an hour playing doom gives you $15 per hour and the 2nd alternative which is an hour in a chat room gives you $20 per hour. So, the 2nd alternative is more expensive than the first one. Therefore, Bob has forgone the cost of spending an hour in a chat room by attending the class.

4. option D is the right answer. KSU basketball ticket price is 1.5 times the UWG ticket price that means

1 UWG ticket = 1.5 times the KSU ticket

or 1 KSU ticket = 2/3 of UWG ticket which is not present in any of the given options.

5. Option B is the right answer. Surplus means excess supply that occurs when:

(1) the supply is more than the demand in the market

(2) the market price is above the equilibrium price.

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