Which of the following best defines a common market in the context of microeconomics?

• A. A group of countries that allow free movement of goods, services, capital, and labor among member states.
• B. A market in which only private goods are traded and government intervention is minimal.
• C. A market where public goods are provided free of charge to all consumers.
• D. A market structure characterized by a single seller dominating the market.

Answer: (A)

Verified step by step guidance

1. Step 1: Understand the concept of a 'common market' in microeconomics, which refers to a type of economic integration among countries.
2. Step 2: Recall that a common market allows not only free trade of goods and services but also the free movement of factors of production such as capital and labor among member countries.
3. Step 3: Compare the options given: identify which one includes free movement of goods, services, capital, and labor, as this is the key feature of a common market.
4. Step 4: Recognize that other options describe different market concepts, such as private goods markets, public goods provision, or monopoly market structures, which do not fit the definition of a common market.
5. Step 5: Conclude that the best definition of a common market is the one describing a group of countries allowing free movement of goods, services, capital, and labor among member states.