The participants in a market economy cannot pursue their goals freely because they are affected by_________________?
Correct answer: C. prices and incomes
- A. the ratio of gold to paper money
- B. economic laws
- C. prices and incomes
- D. the religious institution
Explanation
Prices and incomes limit what consumers and firms can buy, sell or produce, so market participants cannot pursue unlimited goals freely. Gold ratios and religious institutions are not the general market constraint described here.
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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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