Which situation is more likely to occur in a market economy than a command economy?
A. An inventor designs and produces a new type of car
B. People line up for cheap but scarce products.
C. A student is guaranteed a job out of college.
D. A committee chooses which farms should receive new tractors.
A,B,C, or D?
A. An inventor designs and produces a new type of car
This situation is more likely to occur in a market economy than in a command economy. In a market economy, individuals have the freedom to innovate and produce goods and services based on consumer demand and their own entrepreneurial initiative. Governments in market economies generally do not direct these activities, so inventors and entrepreneurs can act independently. In contrast, a command economy is characterized by central planning where decisions about production and investment are made by the state or central planners, leaving less room for individual innovation and production choices.