2.4 price

Question 1

what does price mean

Answer 1

the sum of money you have to pay for a good or service. it is determined by the interaction of supply and demand

Question 2

is price a reflection of worth

Answer 2

price is used to indicate worth but it is not an accurate measure of worth all the time.

Question 3

what is meant by rationing

Answer 3

when resources are scarce, prises rise so that only those willing to pay the higher price are allocated to resource

Question 4

what does market forces mean

Answer 4

forces that determine price and availability of resources without government intervention

Question 5

how do markets determine price

Answer 5

market brings buyers and sellers together

supply and demand will interact to set the general price level for a good or service

market forces push prices up if there is an increase in demand or a fall in supply and pushed them down if demand falls or supply increases

Question 6

what role do markets have in allocating resources

Answer 6

price distributes scarce resources among producers