Chapter 1, Problem 6MCQ

To determine

The question requires us to determine the suitable characteristics of command economy from the given options.

Explanation of Solution

In a market economy, market forces, consumers, and producers decide the basic needs of a market which are: what to produce, how to produce, how much to produce, and for whom to produce. The government has very less involvement in these decisions.

In a command economy, the government with the help of participant authorities decides the production and consumption capacities. The government plays a significant role in such economy.

In the given options:

• Property right for individuals is the feature of market economy where the rights of producers and consumers are well distributed.
• Land, labor, capital, and entrepreneurship are the factors of production in a market economy.
• Government in the market economy provides subsidies and incentives to the producers to produce the consumer goods to promote exports and domestic products.
• Presences of long lines of consumers represent the command market condition.

When central authority makes decisions about consumption and production then market represents the command economy system. So, option “e” exists in a command economy not in a market economy.