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 answer is the most characteristic of a market economy among the options provided. In a market economy (also known as a capitalist economy), individuals have the freedom to create and market new products based on consumer demand and the potential for profit. An inventor designing and producing a new type of car fits this description because it exemplifies entrepreneurial activity and innovation driven by market forces rather than central planning.
Options B, C, and D are more characteristic of a command economy (also known as a planned economy), where the government controls production, distribution, and prices, and may ration goods, guarantee employment, or allocate resources according to a central plan.