How Markets and Prices Allocate Resources (AQA A-Level Economics): Quizzes
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Practise the questions
10 questions from this quiz
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Practise the questions
10 questions from this quiz
Which of the following is NOT one of the four key functions of prices?
Which of the following is NOT one of the four key functions of prices?
The redistributive function
What does the signalling function of prices do?
What does the signalling function of prices do?
Communicates vital info to buyers/sellers
When prices rise, what incentive is created for producers?
When prices rise, what incentive is created for producers?
To increase production of the good
How does the rationing function eliminate excess demand?
How does the rationing function eliminate excess demand?
Rising prices reduce quantity demanded
How does the allocative function differ from the rationing function?
How does the allocative function differ from the rationing function?
It operates across multiple markets
What does Adam Smith's 'invisible hand' concept explain?
What does Adam Smith's 'invisible hand' concept explain?
How markets coordinate without central plan
What is consumer sovereignty?
What is consumer sovereignty?
Consumers hold most power in the market
What problem occurs in a monopoly regarding sovereignty?
What problem occurs in a monopoly regarding sovereignty?
Producer sovereignty replaces consumer one
What is 'government failure' according to pro-free-market economists?
What is 'government failure' according to pro-free-market economists?
Intervention worse than market failure
What do interventionist economists believe about markets?
What do interventionist economists believe about markets?
Markets often perform badly