Which of the following is true?
A) When a market price allocates resources, all people who are willing and able to pay that price get the resource.
B) A command system works well when the range of activities to be monitored is large and complex.
C) When the government decides how to allocate tax dollars among competing uses, resources are allocated by market prices.
D) When a manager offers everyone in the company the opportunity to win a prize, resources are allocated by a lottery.

Question

Quizplus · Accepted Answer

This is the definition of how a market economy allocates resources - those who can and are willing to pay the market price get the resource.

B is incorrect because a command system is typically used when the government wants more control over resource allocation, and is not well-suited for complex systems.

C is incorrect because when the government decides how to allocate tax dollars, it is not done through market prices, but rather through budgetary decisions.

D is incorrect because resources are allocated randomly in a lottery, not by any sort of demand or willingness to pay.

Which of the Following Is True