What Economic Thinker was very focused upon the price mechanism

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1 What Economic Thinker was very focused upon the price mechanism
What Economic Thinker was very focused upon the price mechanism? (Hint: He wrote the Wealth of Nations, was Scottish and lived with his mum )

2 Price Mechanism Rationing – due to scarcity, not everyone is able to buy everything they want; when demand is greater than supply, prices will rise so that the good/service is rationed out only to those who can afford to pay for the items. Incentive – when the price of a product rises it creates an incentive for firms to shift production towards those products that help generate higher profits. (It also encourages a further search for productive efficiency gains). Likewise falling prices may create an incentive for firms to move away from the production of a product. Signalling – when the price of a product rises it signals to producers that the demand for that product is probably high and firms should increase production. Prices are helping to determine where and how resources should be allocated.

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5 Micro / Macro…what is the effect of a fall in the value of the Pound in terms of price mechanism?
Rationing Incentive Signalling

6 What is the effect of a subsidy to buy an electric car?
Rationing Incentive Signalling

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