In the current Canadian economy, the majority of choices on how resources are allocated are made by
A)legal contracts.
B)the various levels of government.
C)consumers and firms through the price system.
D)negotiation between unions and firms.
E)business firms only.

Question

Quizplus · Accepted Answer

In a market economy like Canada's, the majority of choices on how resources are allocated are made by consumers and firms through the price system. The demand of consumers and the supply of firms interact to determine prices and quantities, and producers respond to these signals by allocating resources to produce the goods and services that are most in demand. While government and legal contracts can also influence resource allocation, they do not have the same pervasive and continuous impact as the price system. Unions may negotiate terms and conditions of work, but they do not typically make decisions about resource allocation. Business firms are important agents in the market economy, but they are ultimately subject to the decisions and preferences of consumers.

In the Current Canadian Economy, the Majority of Choices on How