Which of the following are features of a market economy but not a command economy?

Choose 1 answer:
(A) Prices are set by a central authority.
(B) Decisions about how production is allocated to households are determined by a central authority.
(C) Buyers and sellers rely on prices created in markets to provide information about the relative value of goods, services, and resources.
(D) Decisions about what is produced are determined by a central authority.
(E) Resources are allocated by a central authority.

Question

Which of the following are features of a market economy but not a command economy?

Choose 1 answer:
(A) Prices are set by a central authority.
(B) Decisions about how production is allocated to households are determined by a central authority.
(C) Buyers and sellers rely on prices created in markets to provide information about the relative value of goods, services, and resources.
(D) Decisions about what is produced are determined by a central authority.
(E) Resources are allocated by a central authority.

Accepted Answer

***C*** ∻Key Concept∻ ⚹Price Mechanism in Market Economies⚹ ∻Explanation∻ ⚹In a market economy, prices are determined by the forces of supply and demand rather than by a central authority. These prices provide information and signals to both buyers and sellers about the relative value of goods, services, and resources, guiding their decisions in the allocation of resources.⚹◊What impact does the reliance on market prices for information about the value of goods and resources have on the efficiency of a market economy compared to a command economy?⍭ Generate me a similar question◊

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