Which of the following statements about markets is correct? I. A market helps resources move to their highest-valued uses by means of prices.
II) A market encompasses the exchange arrangements of both buyers and sellers.
A) I only
B) II only
C) Both I and II
D) Neither I nor II

Question

Quizplus · Accepted Answer

Both statements are correct. Statement I correctly describes the function of a market by indicating that resources (goods, services, and factors of production) move to their highest-valued uses through the price mechanism. Statement II correctly characterizes a market by its exchange arrangements, which include the buyers and the sellers coming together and negotiating on the terms of exchange.

Which of the Following Statements About Markets Is Correct? I