Consider the following two statements about types of economies: Statement I: In a centrally planned economy, the government takes all major decisions regarding production, exchange, and consumption of goods and services. Statement II: In a market economy, economic activities are restricted to physical marketplaces where buyers and sellers must interact face-to-face. Which of the above statements is/are correct?
Only Statement I is correct
Only Statement I is correct is correct.
Statement I is true: in a centrally planned economy the government (central planning authority) decides what to produce, how much to produce, how to distribute goods and services and at what prices, owning most means of production.
Statement II is false: a market economy is one where economic decisions are guided by the free interaction of demand and supply through the price mechanism. A market in economics is any arrangement through which buyers and sellers exchange goods, including online trade, telephone orders and stock exchanges; a physical face-to-face meeting is not required.
Hence only the first statement holds.
Similar Questions
Iso-utility curve is another name for ______ curve.
Which of the following is NOT an exception to the 'Law of Demand'?
Which of the following is NOT an exception to the 'Law of Demand'?
Suppose a firm increases all inputs by 50% and its output increases by 75%. What type of return to scale is this?
Name the principle that states that as production increases, the cost per unit decreases?
What is the term for the situation where demand exceeds supply in a market?
Consider the following statements about market equilibrium:
Statement I: In equilibrium, the quantity that all firms wish to sell equals the quantity all consumers want to buy.
Statement II: Excess supply exists when the market demand is greater than the market supply.
Which of the above statements is/are correct?
Which of the following best explains the Law of Diminishing Marginal Utility?
Which curve in microeconomics shows the relationship between price and quantity demanded?
Important Questions from Microeconomics
Which of the following statement is correct?
I. Indifference curves are sloping from left to right.
II. Higher indifference curve gives a higher level of utility.
According to Ricardo what condition is necessary to make possible international trade between two countries?
Match List I with List II:
List- I
Shape of revenue curve of the firm
List – II
Market structure
A.
Kinked revenue-curve (I)
Monopolistic competition B.
Infinitely elastic straight line curve (II)
Perfect competition C.
Relatively less elastic curve (III)
Oligopoly D.
Relatively high elastic curve (IV)
Monopoly.
Choose the correct answer from the options given below -Marginal revenue of a firm is constant throughout under _________.
The cost curve which is a rectangular hyperbola is:
