Recently, economic engineers have begun to design ________ to increase the signal to noise ratio of ________.
A) prices; markets
B) markets; prices
C) incentives; behaviors
D) opportunity costs; prices

Question

Quizplus · Accepted Answer

Economic engineers have focused on designing better markets to increase the signal to noise ratio, which means improving the ratio of relevant information (signal) to irrelevant information (noise) in the market. Prices are a fundamental component of markets, but they are not the sole focus of recent design efforts. Therefore, option A is incorrect. Incentives are also important to shape behaviors, but this is not the same as the design of markets. Thus, option C is incorrect. Opportunity costs are a crucial concept in economics, but they are not directly related to the signal to noise ratio in markets. Therefore, option D is incorrect.

Recently, Economic Engineers Have Begun to Design ________ to Increase