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JAMB Economics 1980 Question 33

Question 33

Economic Systems

In a free-market economy, the rationing of scarce goods is done principally by

  1. A.the government
  2. B.business organizations
  3. C.the price mechanism
  4. D.consumers
  5. E.both A and B above.
Show the answer and explanation

Answer: C (the price mechanism)

Explanation

In a free market, prices decide who gets scarce goods: those willing and able to pay the price.