Paper 1 · price mechanism

The price system allocates resources through interaction of demand and supply forces. Which one is not a function of prices?

Asignalling function

Bincentive function

Cbartering function

Drationing function

Explanation: Bartering is a method of exchange that does not involve prices; it is not a function of the price mechanism. The marking scheme confirms answer C.

ZIMSEC Economics Paper 1, November 2009, Q2

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The price system allocates resources through interaction of demand and supply forces. Which one is not a function of prices?

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