Question

A market system is characterized by the private ownership of resources and the use of markets and prices to coordinate and direct economic activity. The system allows for the private ownership of capital, communicates through prices, and coordinates economic activity through markets, places where buyers and sellers come together to buy and sell goods, services and resources. Directly resulting in competition and a widely dispersed economic power. The command economy the government owns most property resources and economic decision making occurs through a central economic plan. The planning board, appointed by the government determines production goals for each enterprise. The division of output between capital and consumer goods is centrally decided based on the board’s long-term priorities

Answer 1

Answer:

The statement is: True.

Explanation:

In a market economy, market forces rather than central planning decide the economic decisions and prices. Market forces refer to the cumulative impact of all decisions made by individual actors in the market, such as customers and corporations led by their free will.

A command economy is one where, in the long run, the government controls the economy, operates as the central planner, determines production quotas and distribution rates and sets prices. Those kinds of economies occur in communist or socialist states like China, North Korea, and Cuba.

Answer 2

Answer:

TRUE

Explanation:

The given descriptions matches the concepts for a free.market or capitalism economy and a communist or socialist economy.

Is important to notice that both system have so failure:

in the market economy there are public goods which cannot be asle exclusively or aren't restricted to one or another (light in the street, highroads, public parks) and there are beside competitive market those udner which monopolies or oligopolies arise generating distorsions.

The final concept are externalities which are secondary effect not expressed in the price.

For central econmies is important to notice this generates an army of burocrats with a behemonth task to set millions of prices every day Being that impossible to do even with todays technologies.