Economic Systems: Market vs. Command

How are resources allocated in a command economy?

• Based on consumer demand and market forces.

• Through a system of barter and trade.

• According to the decisions made by central planners.

• By private businesses seeking to maximize profits.

What characterizes private ownership in a market economy?

• The state owns all property and businesses.

• Individuals and businesses own property and businesses.

• All property is shared equally among citizens.

• Foreign entities own the majority of economic resources.

What is central planning in a command economy?

• A decentralized decision-making process by individual consumers and producers.

• A process where market forces determine the production and distribution of goods.

• A method where the government makes all decisions about the economy's direction.

• A system where local governments have the autonomy to make economic decisions.

In a command economy, how is state ownership of businesses justified?

• It ensures competition and consumer choice.

• It allows for the personal wealth of the rulers.

• It is believed to lead to a more equitable distribution of resources.

• It is necessary for the protection of intellectual property rights.

How does a command economy theoretically prevent monopolies?

• By allowing free competition.

• Through deregulation of industries.

• By having all industries state-owned and controlled.

• By encouraging foreign investment.

In a command economy, who typically determines the price of goods and services?

• Consumers based on their preferences.

• Producers based on supply and demand.

• The government or central planning authority.

• International market trends.