Drag and drop each statement into the box with the economy it best reflects.
command economy
market economy
Business owners make decisions about how to run their companies.
The government decides how much of an item should be produced.
Legal policies are put into place that control prices.
Prices are set by supply and demand.
Command economy:
- The government decides how much of an item should be produced.
- Legal policies are put into place that control prices.
Market economy:
- Business owners make decisions about how to run their companies.
- Prices are set by supply and demand.
that's wrong please fix it
Command economy:
- The government decides how much of an item should be produced.
- Legal policies are put into place that control prices.
Market economy:
- Business owners make decisions about how to run their companies.
- Prices are determined by supply and demand.
To determine which statements best reflect a command economy or a market economy, we need to understand the basic characteristics of each type of economy.
In a command economy:
- The government has control over economic decision-making.
- The government determines what goods and services should be produced, in what quantities, and how they should be distributed.
- Prices are often set by the government rather than by supply and demand.
In a market economy:
- Economic decision-making is primarily driven by the interactions of private individuals and businesses.
- Business owners have the freedom to make decisions about how to run their companies, such as what to produce and how much to produce.
- Prices are determined by the forces of supply and demand in the market.
Now, let's match each statement to the economy it best reflects:
1. Business owners make decisions about how to run their companies.
This statement reflects a market economy since it highlights the freedom of business owners to make decisions in a market-driven economy.
2. The government decides how much of an item should be produced.
This statement reflects a command economy because it indicates that the government has the authority to determine the quantity of production.
3. Legal policies are put into place that control prices.
This statement reflects a command economy as it implies that the government establishes regulations and controls over prices.
4. Prices are set by supply and demand.
This statement reflects a market economy since it emphasizes that prices are determined by the interaction of supply and demand forces in the marketplace.
So, to summarize:
- Business owners making decisions indicates a market economy.
- The government deciding production quantities indicates a command economy.
- Legal policies controlling prices indicate a command economy.
- Prices determined by supply and demand indicate a market economy.