Which situation is more likely to occur in a command economy than a market economy?
A a factory lays off unneeded workers
B a farm sells fruit by the side of the road
C a Union negotiates a better pay rate with employers
D a failing railroad receives assistance from around the country
A a factory lays off unneeded workers
The situation that is more likely to occur in a command economy than a market economy is option D: a failing railroad receiving assistance from around the country.
In a command economy, the government has control over economic decisions and resources. This means they can intervene and provide financial assistance, subsidies, or bailouts to failing businesses, such as a failing railroad. The government may view the railroad as a vital infrastructure or important industry and provide support to prevent its collapse.
In a market economy, however, businesses operate based on supply and demand forces and are subject to competition. If a business, such as a failing railroad, is not able to generate profits or meet market demands, it is more likely to face bankruptcy or closure. In such a case, it is less likely that the failing railroad would receive assistance from the government or from sources around the country.
To determine which situation is more likely to occur in a command economy than a market economy, we need to understand the characteristics of each system.
In a command economy, the government has central control over resource allocation, production, and distribution. Decisions regarding what goods and services are produced, how they are produced, and who receives them are made by the government. On the other hand, a market economy is primarily driven by the forces of supply and demand, with little government intervention.
Let's analyze each situation in the context of these economic systems:
A) A factory lays off unneeded workers:
In a command economy, where the government controls production decisions, it is more likely for government officials to determine that certain workers are no longer needed and initiate layoffs. The government may prioritize efficiency or economic planning over individual job security. In a market economy, however, businesses operate according to market conditions, and decisions regarding layoffs are typically based on changes in demand, productivity, or financial circumstances.
B) A farm sells fruit by the side of the road:
Selling fruit by the side of the road is typically associated with small-scale, individual entrepreneurship, characteristic of market economies. In a market economy, individual farmers have the freedom to sell their produce directly to consumers. In contrast, a command economy is less likely to allow such individual entrepreneurial activities, as it tends to emphasize collective decision-making and centralized distribution networks.
C) A union negotiates a better pay rate with employers:
Collective bargaining and negotiations between unions and employers are common occurrences in market economies. Unions advocate for workers' rights, and employers are motivated to offer better pay or improved working conditions to attract and retain skilled workers. In a command economy, where the government sets wages and employment terms, there is usually no need for unions to negotiate, as the government makes all labor-related decisions.
D) A failing railroad receives assistance from around the country:
In a market economy, failing businesses may seek assistance from various sources, such as investors, financial institutions, or government bodies responsible for economic development. However, in a command economy, where the government controls economic activities, it is more likely for a failing railroad to receive assistance as part of the government's effort to maintain stability and prevent negative consequences such as unemployment or disruptions in transportation networks.
Based on our analysis, the situation that is more likely to occur in a command economy than in a market economy is:
A) A factory lays off unneeded workers