Which one of the following statements correctly describes the views of key economic thinkers on the price mechanism and resource allocation?
Adam Smith argued that the "invisible hand" of the price mechanism relies on altruistic motivations to allocate resources efficiently.
Karl Marx believed that a market-determined price mechanism is the most equitable way to distribute goods according to a worker's labor input.
Friedrich Hayek argued that a central planning authority is necessary to interpret and distribute the information transmitted by market price signals.
Friedrich Hayek viewed the price mechanism as a spontaneous communication network that signals changes in relative scarcity and consumer preferences.
16 exam-style questions on Edexcel A A Level Economics 1.2.7 Price mechanism. Each one has a worked solution and a mark scheme showing where the marks go.