In 18th century Europe, governments gave guilds legal authority to limit production of goods. How did this authority either obstruct or improve the market mechanism?
A) It obstructed the market mechanism because with one more party having to coordinate activities (the guilds) there were delays in getting the products to consumers.
B) It improved the market mechanism because the government's actions provided the correct set of signals to the market so that producers can adjust their output to better meet the needs of consumers.
C) It improved the market mechanism by making it more efficient because the guilds were able to quickly identify and rectify any market shortages and surpluses.
D) It obstructed the market mechanism because the guild's actions prevented the forces of demand and supply from coordinating the self-interested decisions of producers and consumers.
D
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Indicate whether the statement is true or false
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A. cost that is equal to a perfectly competitive one. B. lower price than the perfectly competitive one. C. lower quantity than the perfectly competitive one. D. higher quantity than the perfectly competitive one.
When a hurricane destroys a significant portion of an apple crop:
A. apple prices decline, and quantity sold rises. B. apple prices rise, and quantity sold falls. C. apple prices rise, and quantity sold rises. D. apple prices decline, and quantity sold falls.
According to the quantity theory, in the long run, an increase in the growth rate of ________ leads to an increase in the ________
A) real GDP; inflation rate B) the quantity of money; growth rate of real GDP C) the quantity of money; inflation rate D) real GDP; growth rate of velocity