--%>

Market system & a command economy try to cope with economy

Contrast how a market system and a command economy try to cope with economic scarcity?

E

Expert

Verified

A market system allows for the private ownership of resources and coordinates economic activity through market prices.  Participants act in their own self interest and seek to maximize satisfaction or profit through their own decisions regarding consumption or production.  Goods and services are produced and resources are supplied by whoever is willing to do so.  The result is competition and widely dispersed economic power.

The command economy is characterized by public ownership of nearly all property resources and economic decisions are made through central planning.  For each enterprise the planning board which is appointed by the government determines production goals.  The division of output between capital and consumer goods is centrally decided based on the board’s long-term priorities.

   Related Questions in Business Economics

  • Q : The economies of Japan and US Question:

    Question: What can we learn from the Japanese experience? Is the US headed for a 'lost decade? Answer: There was

  • Q : Resource markets in simple circular

    Can someone help me in finding out the right answer from the given options. In resource markets in a simple circular flow model, house-holds exchange their _________ for _________. (1) Resources | income. (2) Goods | profits. (3) Labor | goods. (4) Devotion | enlighte

  • Q : Illustrate the 4th role is the

    Illustrate the 4th role is the reallocation of resources?

  • Q : What are the determinants of supply

    What are the determinants of supply?

  • Q : Define internal rate of return What do

    What do you understand by the term internal rate of return?

  • Q : Explaination on Economical Management

    ECONOMICS Explain why each of the following statements is True, False, or Uncertain according to economic principles. Use diagrams where appropriate. Unsupported answers will receive no marks. It is the ex

  • Q : How can we evaluate cost of capital How

    How can we evaluate cost of capital?

  • Q : Equal share criterion of distribution

    According to the equivalent share criterion of the distribution, individuals must: (1) Share income according to personal requirement. (b) All make equivalent shares of output. (3) Each consists of incomes equivalent to their productive output. (4) Re

  • Q : Impact of dollar on aspects of

    Question Discuss the impact of dollar depreciation on the various aspects of American Economy. Devaluation of the DollarIntroduction:

  • Q : History of King Louis world of commerce

    Early in the 18th century, a leading industrialist responded to an advisor of King Louis IV of France, who asked how the crown could most excellent facilitate the world of commerce, along with “Laissez nous faire,” that im