The central coordinating mechanism in a market economy.
Explanation of Solution
A market economy is a system in which decisions related to the economy and the pricing of products and services are directed by the exchanges that take place between country’s citizens and businesses. The central coordinating mechanism in a market economy is the
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Chapter 3 Solutions
MICROECONOMICS
- The market economy does have the advantage of increased efficiency, productivity, and innovation. However, what are some of the disadvantages of a market economy?arrow_forwardWhy is the law of demand and the law of supply a useful economic model?arrow_forwardIn a market system, provide an example for when government can enhance or harm any of the processes involved in terms of what should be produced, how it should be produced, and for whom.arrow_forward
- What does the Powerbar model tell us about how creativity fits into a market economy?arrow_forwardWhat are the main differences between a capitalist (market-based) and socialist (command) economic system?arrow_forwardExplain what is meant by market failure and outline the sources of market failure.arrow_forward
- Economics Today and Tomorrow, Student EditionEconomicsISBN:9780078747663Author:McGraw-HillPublisher:Glencoe/McGraw-Hill School Pub Co