Rashmi has her own online stationery business, creating greeting cards, thank-you cards, and invitations. When she makes several
new designs, she posts them on her website and asks all customers who visit the site to vote on the ones they like best. She also posts a blank card template and invites her customers to create their own designs. Based on customer feedback and designs, she decides which cards to produce and sell. This scenario best describes: __________
A market economy answers the three economic questions by allocating resources and goods through markets, where prices are generated.
There are two extremes of how these questions get answered. In command economies, decisions about both allocation of resources and allocation of production and consumption are decided by the government. In market economies, there is private ownership of resources—established though property rights—and the factors of production and consumption are all coordinated through markets. In a market system, resources are allocated to their most productive use through prices that are determined in markets. These prices act as a signal for buyers and sellers. Most economies are mixed economies that lie between these two extremes.
In either system, a rational agent would allocate resources and production using marginal analysis. In command economies, this is more difficult to do because without markets, prices fail at being an effective signal.
Based on the information provided within the question it seems that the authority that Charlene has given Megan is Apparent Authority. This term refers to a subtle authority given to an individual which a reasonable third party would understand that they are an agent acting on behalf of their employer. Such an example would be an employee driving a UPS truck, any reasonable person would see the UPS truck as a sign that the individual driving has authority to act on behalf of the UPS company. The UPS truck is similar to the business card that Megan has, giving her apparent authority to act on behalf of Thrift City.
