Briefly describe how your decision about what products to make would differ if you were a manufacturer in a command, market, or mixed economy.
What will be an ideal response?
Should accurately differentiate among the three economic systems. In a command economy, the government would tell you exactly what to produce. In a market economy, consumer sovereignty and the desires of the customers would guide you as to which products would be the most profitable. In a mixed economy, the customer desires would primarily guide you, but you would still have to follow government guidelines about product safety, working conditions, advertising, allowable materials, and other regulations.
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Unemployment compensation is an example of:
A) non-discretionary expenditures. B) discretionary expenditures. C) taxes. D) none of the above.
The change in consumption divided by a change in income is called the
a. consumption function b. marginal propensity to consume c. marginal propensity to spend d. spending function e. changing propensity to consume
(Requires Appendix material) Which of the following statements is correct?
A) TSS = ESS + SSR B) ESS = SSR + TSS C) ESS > TSS D) R2 = 1 - (ESS/TSS)
According to the search model, the marginal cost of acquiring information about a product
a. is greater for a doctor than a nurse's aide b. is the same for high-income consumers as for low-income consumers c. is greater for expensive items than for cheap items d. is greater for cheap items than for expensive items e. diminishes as more information is acquired