The price mechanism does not act as a ?
Correct answer: D. Indicator of income
- A. Signal
- B. Incentive
- C. Rationing device
- D. Indicator of income
Explanation
Prices signal scarcity, create incentives, and ration goods among buyers, but they do not directly indicate a person's income. Income is determined by factors such as wages, profits, and transfers.
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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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