Using complete sentences, compare and contrast a traditional economy and a command economy. Make sure to address the three economic questions and to provide at least one incentive for each.
Answers
Answer:
Market economies and command economies occupy two polar extremes in the organization of economic activity. The primary differences lie in the division of labor, or factors of production, and the mechanisms that determine prices. The activity in a market economy is unplanned; it is not organized by any central authority but is determined by the supply and demand of goods and services. The United States, England, and Japan are all examples of market economies.
Answer:
The factors of production are what a society uses to produce goods and services. This includes land, labor, capital, and entrepreneurship. Land includes all the natural resources people can use for business, such as soil, forests, water, and minerals. Labor is work done for pay, which is what a business’ employees do. Capital includes the things needed to produce good and services. Capital can be broken into two parts: physical capital (buildings, machinery, tools, etc.) and human capital (skills, experience, knowledge, etc.). The entrepreneur is the factor of production that brings all of the other items together. Entrepreneurs are people who start businesses and bring products to market.
Explanation:
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