Question

1. in the asphalt example, the market solves the information problem when allocating resources by

a. aggregating all relevant information about the quantity of asphalt produced into the supply curve.
b. aggregating all relevant information about the quantity of asphalt consumed into the demand curve.
c. collapsing all relevant information about the uses of asphalt into its price.

Explanation:

In economics, market price aggregates information about resource uses to solve information problems in resource allocation.

Answer:

C. collapsing all relevant information about the uses of asphalt into its price