Question

Imagine that you have opened a factory. You have decided to produce bicycles. You can produce as many bicycles as you would like, but government regulations prevent you from charging more than $200 for your bicycles, in order to protect competition in the marketplace. Which statement correctly names this type of economy and explains its democratic benefit? A market economy protects the rights of the individual over what is best for corporations. A market economy limits what companies can do or sell and keeps individual rights intact. A mixed economy offers some protection for consumer rights but still allows a good deal of choice. A mixed economy allows free competition to determine how best to treat consumers without limiting corporations.

Answer 1

A market economy limits what companies can do or sell and keeps individual rights intact.

Answer 2

The correct answer is: " A mixed economy offers some protection for consumer rights but still allows a good deal of choice"

In a mixed economy markets operate under the supervision of governments and economic authorities that intervene to soften inequalities and unfair outcomes.

On one hand, economic decisions are reached by the interaction of individuals, firms and goverment in the markets. But, on the other hand, economic authorities implement income redistribution systems that reduce income inequalities and generate fairer market outcomes for all the individuals that conform the society.