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    Question

    Which of the following is NOT a function of price?

    A To act as a means of rationing scarce supplies Correct Answer Incorrect Answer
    B To ensure emotional wellbeing Correct Answer Incorrect Answer
    C Signaling mechanism Correct Answer Incorrect Answer
    D To provide incentives Correct Answer Incorrect Answer

    Solution

    First, prices determine what goods are to be produced and in what quantities; second, they determine how the goods are to be produced; and third, they determine who will get the goods. The goods so produced and distributed may be consumer items, services, labour, or other salable commodities.

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