Which situation is more likely to occur in a market economy than a command economy?
An inventor designs and produces a new type of car
People line up for cheap but scarce products.
A student is guaranteed a job out of college.
A committee chooses which farms should receive new tractors.
which is right?
In a market economy, economic decisions and the pricing of goods and services are guided by the interactions of a country's individual citizens and businesses. There is less government intervention compared to a command economy, where the government makes all decisions on production and consumption.
Among the situations provided:
- An inventor designs and produces a new type of car: This situation is more likely to occur in a market economy. Innovation is often driven by competition and the potential for profit, which are strong motivators in a market economy.
- People line up for cheap but scarce products: This could theoretically happen in any economy, but it is more characteristic of command economies where the government controls supply, which can lead to shortages.
- A student is guaranteed a job out of college: This is more typical of a command economy where the government often orchestrates employment to ensure low levels of unemployment.
- A committee chooses which farms should receive new tractors: This scenario is indicative of a command economy where the government directs resource allocation rather than the market.
So, the situation most likely to occur in a market economy is the first one: an inventor designs and produces a new type of car.