Multiple Choice
Which of the following methods may an economist use to test a hypothesis in positive analysis?
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0. Basic Principles of Economics
Positive and Normative Analysis
Multiple Choice
Which of the following principles reflects the concept of market justice?
A
Government intervention is necessary to achieve equitable outcomes.
B
Distribution of goods should be based on individual needs regardless of ability to pay.
C
Allocation of resources is determined by voluntary exchange in competitive markets.
D
Prices should be set by central authorities to ensure fairness.
Verified step by step guidance1
Understand the concept of market justice, which emphasizes that the allocation of resources and distribution of goods should be determined by voluntary exchange in competitive markets without government intervention.
Recognize that market justice is based on the idea that individuals are free to make their own economic choices, and outcomes are considered fair if they result from these voluntary transactions.
Compare the given options to the definition of market justice: options involving government intervention or central price setting do not align with market justice principles.
Identify that the principle stating 'Allocation of resources is determined by voluntary exchange in competitive markets' directly reflects the concept of market justice.
Conclude that the correct answer is the option emphasizing voluntary exchange and competitive markets, as it best represents the market justice philosophy.
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