In a market system, ________ provide signals about whether resources are relatively scarce or abundant.
A) prices
B) buyers alone
C) government officials
D) scientists

Question

Quizplus · Accepted Answer

In a market system, prices act as signals that reflect the relative scarcity or abundance of resources. When a resource is scarce, its price will tend to increase due to higher demand, and vice versa. Therefore, prices play a critical role in directing resources to their most productive uses in a market economy. Buyers alone cannot provide signals about scarcity or abundance, as they may not have perfect information about the market conditions. Government officials may have an impact on markets, but they do not necessarily reflect the true supply and demand signals. Scientists may be important for providing information, but they do not have a direct role in the price-setting mechanism of a market system.

In a Market System, ________ Provide Signals About Whether Resources