Question

1. In a market economy, ___________________.

a. economic equality is a natural outcome.

b. individuals are given incentives to work hard

c. government interferes with the economy frequently

In a command economy, ________.

a. businesses and consumers are assumed to be the best judges of how resources should be allocated

b. the government sets goals and determines the price and quantity of what is produced

c. each enterprise sets its goals before making reports to the central government

Governments should not exist in a truly free economy.

True or

False

Answer 1

1. in a market economy a.economic equality is a natural outcome. market economy is also known as free market situation where equilibrium can be achieved through the demand supply interchange or commonly known as invisible hand.

2.In a command economy b.the govt sets goals and determines the price and qiantity of what is produced. As command economy is run by the govt rather than the free market invisible hand , govt decides everything for it.

It is false that Governments should not exist in a truly free economy. Theoratically in a free market situation sellers and buyers can conduct the business freely without any govt intervention but there is the some cost available for for free market. One of the major importance of govt intervention is protecting the property rights. Even in a fre market economy property right can be misused without govt intervention thus govt should always interven to some extent to keep the rules and regulation going even in a free market economy.

Answer 2

1. in a market economy a.economic equality is a natural outcome. market economy is also known as free market situation where equilibrium can be achieved through the demand supply interchange or commonly known as invisible hand.

2.In a command economy b.the govt sets goals and determines the price and qiantity of what is produced. As command economy is run by the govt rather than the free market invisible hand , govt decides everything for it.

It is false that Governments should not exist in a truly free economy. Theoratically in a free market situation sellers and buyers can conduct the business freely without any govt intervention but there is the some cost available for for free market. One of the major importance of govt intervention is protecting the property rights. Even in a fre market economy property right can be misused without govt intervention thus govt should always interven to some extent to keep the rules and regulation going even in a free market economy.