A-LevelEconomicsBasic economic ideas and resource allocation9708/12 · Oct/Nov 2013 · Q131 Mark
In which set of circumstances will prices play no part in determining how resources are allocated between alternative uses but may still have a role as a rationing mechanism?
AThe government sets maximum prices for all goods above their market clearing price.
BThe government sets minimum wages for all workers below the market rates of pay.
CThe quantities of consumer goods produced are determined by the government.
DThe total income consumers have available to spend is fixed by the government.
✓ Correct answer
C: The quantities of consumer goods produced are determined by the government.
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