ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -In its purest form, a market economy answers the three economic questions by allocating resources and goods through markets, where prices are generated. In its purest form, a command economy answers the three economic questions by making allocation decisions centrally by the government.

Detailed explanation-2: -A market economy is the opposite of a command economy. In a market economy, each person answers the 3 basic questions (what, for whom, how). People make decisions for themselves.

Detailed explanation-3: -We will briefly describe each of these three types. In a command economy, what goods and services are produced, how they are produced, and for whom they are produced are all questions answered by government planning. The government makes economic decisions for the good of society.

Detailed explanation-4: -Private property: allows people to own and control their possessions as they wish. Profit motive: people are free to risk any part of their wealth in a business venture. Competition: the struggle among sellers to attract consumers with the best products at the lowest prices.

Detailed explanation-5: -The common features among all the different forms of capitalism is that they are predominantly based on the private ownership of the means of production and the production of goods and services for profit; the market-based allocation of resources; and the accumulation of capital.