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What is the role of prices in allocating resources in a market economy?
This is from P.47 . right ?
The classical model depends on the market with instead of the government allocating the resources of the nation?
price
Why do some people believe that the market system is the best mechanism for allocating scarce resources?
Some people believe that the market system is the best mechanism for allocating scarce resources because it allows for competition, which can drive efficiency and innovation. They argue that market forces of supply and demand provide a self-regulating mechanism that can efficiently allocate resources based on consumer preferences and willingness to pay. Additionally, proponents of the market system often view it as promoting individual choice and freedom.
What is an advantage of using the market mechanism to allocate resources between alternative uses?
An advantage of the market mechanism over government intervention as a method of allocating resources is efficiency. The forces of demand and supply create automatic economic order.
What term denotes s nation's basis for allocating its resources among its citizens?
The term that denotes a nation's basis for allocating its resources among its citizens is "economic system." This system defines how resources are distributed, whether through market mechanisms, government planning, or a combination of both. Common types of economic systems include capitalism, socialism, and mixed economies, each with distinct approaches to resource allocation.
Why competitive market is the better one allocating any good?
A market with a large number of buyers and sellers, such that no single buyer or ... A competitive market achieves efficiency in the allocation of scarce resources if ... any greater satisfaction by producing more of one good and less of another.
The price mechanism theory is not an effective tool of allocating resources in less developed countries. discuss?
The price mechanism is based on the economical principles of supply and demand. It does not work with underdeveloped nations because poverty can interfere with basic supplies that people want and need. Therefore, it does not accurately allow the market to determine necessities since poor people may not be able to buy what they need.
Do you think that markets promote social welfare?
Markets can promote social welfare by efficiently allocating resources and fostering competition, which can lead to better quality goods and services at lower prices. However, they can also result in inequalities and market failures, such as monopolies or externalities, that may harm certain groups. Therefore, while markets have the potential to enhance social welfare, effective regulation and interventions are often necessary to address their shortcomings and ensure broader benefits.
A terrific opportunity to zero in on a potential market?
This opportunity allows for focused research and analysis to identify a specific target market for potential growth. By narrowing down the market, businesses can better tailor their products or services to meet the needs of this particular group, increasing the chances of success. It also helps in allocating resources efficiently and effectively.
What is the importance of financial market?
The 'main' part of financial markets allocate resources within the economy. In a capitalist / free market system, they perform the role of economic central planner, "choosing" the best industries for a country to develop by allocating resources, in the same way . As such they are the core of free market economies. In addition, there is a derivatives market which shifts risk around, moving risk towards those best able to bear or control it. Finally, the currency market facilitates international trade
Is allocating scarce resources through the price mechanism in a pure capitalistic economy will ensure the fairest usage of resources true or false?
That depends on the meaning of the term "fairest". The true argument for a purely free market is not the "fair" usage of resources but the right of each man to use their own resources in accordance with their own reasoning about their lives. If you put a "fair" use of resources above that right you condemn mankind to slavery to whoever gets to define this concept.
Does the Depreciation measure the actual decline in market value of an asset?
No. Depreciation is the process of allocating to expense the cost of a plant asset.
