How the Price Mechanism Works in Markets
Interactive Video
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Business
•
11th Grade - University
•
Hard
Wayground Content
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5 questions
Show all answers
1.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What role does the incentive function play in the price mechanism?
It prevents prices from changing.
It provides information about market conditions.
It excludes consumers from the market.
It motivates suppliers to adjust their output.
2.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
Which function of the price mechanism helps in reaching market equilibrium by motivating suppliers?
Equilibrium function
Signaling function
Incentive function
Rationing function
3.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
How does the rationing function affect consumers when prices rise?
It encourages all consumers to buy more.
It excludes some consumers from the market.
It stabilizes the market price.
It signals suppliers to produce less.
4.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What happens to consumers when the rationing function is in effect due to a price increase?
Consumers receive more information about the market.
Consumers are encouraged to buy more.
All consumers continue to purchase the same quantity.
Some consumers are excluded from the market.
5.
MULTIPLE CHOICE QUESTION
30 sec • 1 pt
What is the primary purpose of the signaling function in the price mechanism?
To prevent price fluctuations.
To inform market participants about changes in conditions.
To exclude consumers from purchasing goods.
To motivate suppliers to increase production.
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