ECONOMICS (CBSE/UGC NET)

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ECONOMICS

PRODUCTIVITY

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
In command economies, who makes the final decision whether to produce cheap cars for the working class or luxury cars for the rich and powerful?
A
consumers in the market
B
managers of auto factories
C
the World Trade Organization (WTO)
D
government officials
Explanation: 

Detailed explanation-1: -A command economy is a system in which a central government makes all economic decisions. Either the government or a collective owns the land and the means of production.

Detailed explanation-2: -In a market economy, the producer gets to decide what to produce, how much to produce, what to charge customers for those goods, and what to pay employees. These decisions in a free-market economy are influenced by the pressures of competition, supply, and demand.

Detailed explanation-3: -Key Takeaways Market economies utilize private ownership as the means of production and voluntary exchanges/contracts. In a command economy, governments own the factors of production and set prices and production schedules. In a market economy, prices are set by supply and demand.

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