A
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

A 
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.

Quizplus · Accepted Answer

The price system serves as a way for consumers and firms to communicate their preferences and needs through the market. This determines the allocation of resources and goods and services in the economy. Legal contracts, government regulations, and union negotiations also play a role in shaping economic activity, but they are not the only means of coordinating economic activity. Business firms also play a role, but they are not the only actors in the economy. Therefore, C is the best answer.