Answers

Question and Answer:

  Home  Chartered Accountant (CA)

⟩ What are the advantages of leaving the allocation of a country resources to the price mechanism?

The main conditions required are:

1. Either a finite number of agents or goods.

2. No externalities - That is, the consumption of one person should not harm or benefit anyone else.

3. No matter how much a person is consuming, they must be able to be made slightly happier by consuming a bit more of something.

 327 views

More Questions for you: