ECONOMICS
MARKETS AND PRICES
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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how well known it is
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the “invisible hand”
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its cost of production
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its market price
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Detailed explanation-1: -What is an important indicator about the relative scarcity of a product or service? Its market price. Antitrust laws try to prevent monopoly in those markets where competition seems desirable.
Detailed explanation-2: -For an individual wishing to acquire a resource commodity, market price is a valid indicator of exchange value. A resource becomes more scarce if its exchange value increases or the sacrifices required to obtain it increase. It is this meaning of scarcity that we term exchange scarcity.
Detailed explanation-3: -Relative scarcity describes a situation where a resource is limited in supply, compared to demand. Oil is an example of a product with relative scarcity, as its supply is limited.
Detailed explanation-4: -Most goods (and services) are economic goods, i.e. they are scarce. Scarce goods are those for which the demand would be greater than the supply if their price were zero. Because of this shortage, economic goods have a positive price in the market.
Detailed explanation-5: -Scarcity falls into three distinctive categories: demand-induced, supply-induced, and structural.