The exchange system is based on_______________?
Correct answer: B. supply and demand
- A. government reaction
- B. supply and demand
- C. lack of labor
- D. goods and service
Explanation
An exchange system allocates goods and services through transactions between buyers and sellers, with supply and demand influencing prices and quantities. Government reaction and labor shortages are not its basic foundation.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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