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8.
Which of the following is not one of the roles performed by prices in a market economy?

A. A signal to consumers
B. A signal to producers
C. A way of allocating resources between competing uses
D. A way of ensuring a fair distribution of incomes

9.
Consider the following statements:

(1) 'Equilibrium' is the selling price above which the number of units demanded by the market starts to decline.
(2) As the selling price of a product increases, the number of units supplied by the market will also tend to rise.

Which of these statements is/are correct?

A. (1) only
B. (2) only
C. Both
D. Neither



Answer :

GinnyAnswer

Final answer:

In a market economy, prices play crucial roles like signaling, resource allocation, and income distribution, while equilibrium reflects a balance between supply and demand at a specific price level.


Explanation:

Prices in a market economy serve multiple functions, including acting as signals to consumers and producers, allocating resources between competing uses, and ensuring a fair distribution of incomes. Equilibrium in a market occurs when quantity supplied equals quantity demanded at a particular price level. 'Equilibrium' signifies a balance in the market, where neither excess demand nor excess supply exists.


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