--%>
Assignment Help - homework help

How prices allocate resources

How prices allocate resources?

E

Expert

Verified

A) The model of supply and demand is an influential tool for analyzing the market.

B) Supply and demand altogether finds out the price of the economy’s services and goods.

  • Such prices serve as signals which guide the allocation of scarce resources in an economy.
  • Prices find out who produces good and how much of all good is generated.

   Related Questions in Macroeconomics

  • Q : Supply of foreign currencies into

    What are the main sources of supply of foreign currencies into domestic economy? Answer: A) Foreigners purchasing home country’s goods and services via exports. B) Foreign investment in home country via

    		•
  • Q : Problem on perfect replacements Imports

    Imports and American cars are much close however not perfect replacements. When the U.S. govt. tried to enhance American car sales by setting a price ceiling of P1 on imported cars: (i) The quantity of cars imported will drop/fall from Q0 to Q1. (ii)

    		•
  • Q : Open-Economy Macroeconomics

    Open-Economy Macroeconomics   Suppose the structure of an economy with a flexible exchange rates is represented by:   C = 200 + 0.85*(Y - T)             &n

    		•
  • Q : Resolving disequilibrium between the

    Assume that you consume bananas and apples, and the marginal utility of the last apple consumed is 6 times the marginal utility of last banana consumed. Though, the price of apples is only 3 times the price of bananas. This disequilibrium among the two goods can be re

    		•
  • Q : Impact on income due to price of excess

    What is the impact on income or output and price of excess demand (Inflationary gap)? Answer: In the condition of excess demand (that is Inflationary gap) there wil

    		•
  • Q : National disposable income What must be

    What must be added to NNPMP to obtain net national disposable income? Answer: The Net current transfers from abroad must be added to NNPMP to get national disposabl

    		•
  • Q : Economics Hello. I need help with my

    Hello. I need help with my assignment, I was sick and lost alot of time.My submission deadline is tomorrow i need your help i have attached the questions Thanks in advance

    		•
  • Q : Consumption curve Illustrate a point on

    Illustrate a point on consumption curve at which APC = 1. Answer: APC = C/Y = 1 is possible when C = Y, that is, Consumption is

    		•
  • Q : Liability of tax problem If the

    If the liability to give a tax is on one person and the burden of tax fall on some other person, state the kind of tax? Answer: These are indirect taxes like sales

    		•
  • Q : What is multiplier Multiplier : The

    Multiplier: The Multiplier is the ratio of change in income by the change in investment. Multiplier (k) = ΔY/ΔI

    		•