Asked by Daniil Yagolnikov on May 05, 2024
Verified
The price mechanism deals _____ with the issue of an equitable income distribution and ____ with the issue of efficiency.
A) well;well
B) poorly;poorly
C) well;poorly
D) poorly;well
Price Mechanism
A system where the forces of demand and supply determine the prices of goods and services.
Equitable Income Distribution
The goal of achieving a more fair and just allocation of income among all members of society, reducing income inequalities.
Efficiency
The optimal use of resources to achieve the desired output with minimum waste or expense.
- Acquire knowledge about market failure, external costs, and the function of the invisible hand.
Verified Answer
JC
Jordan CarsonMay 12, 2024
Final Answer :
D
Explanation :
The price mechanism is efficient in allocating resources and determining production and consumption levels based on supply and demand, but it does not inherently address or ensure equitable income distribution. This is because the price mechanism focuses on efficiency and market equilibrium without considering the fairness or equality of the income distribution outcome.
Learning Objectives
- Acquire knowledge about market failure, external costs, and the function of the invisible hand.