Question

Which of the following is the best example of "markets allocating resources?"

A.consumers buy more electric vehicles when the price of gasoline rises
B. a company develops an innovative new product that leads to bankruptcy for other firms
C.economic decision making is decentralized

Answer 1

Consumers buying more electric vehicles when the price of gasoline rises is an example of markets allocating resources.

Step-by-step explanation:

In a market economy, decision-making is decentralized and market forces, not governments, determine economic decisions. One example of markets allocating resources is when consumers buy more electric vehicles when the price of gasoline rises. This is because as the price of gasoline increases, consumers look for alternative options and turn to electric vehicles. The increase in demand for electric vehicles leads to the allocation of more resources towards the production and development of these vehicles.