What is one significant consequence of the absence of market competition in command economies? Higher productivity Increased innovation Greater consumer choice Little incentive for productive and allocative efficiency
Added by Maxwell M.
Close
Step 1
Step 1: In a command economy, the government controls the means of production and distribution of goods and services. Show more…
Show all steps
Your feedback will help us improve your experience
Ulysses Ng and 101 other Microeconomics educators are ready to help you.
Ask a new question
Labs
Want to see this concept in action?
Explore this concept interactively to see how it behaves as you change inputs.
Key Concepts
Recommended Videos
Would you expect a centrally planned economy to be better at productive efficiency or allocative efficiency? Be sure to define productive efficiency and allocative efficiency in your answer.
Economics. Foundations and Models
The Economic Problem That Every Society Must Solve
In an economy in which decisions are guided by prices and individual self-interest, there is a potential to achieve efficiency in production. There is also a strong need for government intervention in the market. However, there is less efficiency than would be observed in a centrally-planned economy. Additionally, there is more need for a strong legal system to control individual greed than would be needed in a centrally-planned economy.
Azat N.
Imagine you are a consultant who has been asked to summarize the strengths and weaknesses of Directavia, a nation with a pure command economy. Which of the following would you include in your report as weaknesses of Directavia's economy? Check all that apply. The quality and variety of goods tends to be low. Many goods are available only through a black market. The price-setting mechanism is particularly vulnerable to the mispricing of goods for which there are externalities. Workers' earnings are unequal, relative to a market economy.
Sanchit J.
Recommended Textbooks
Principles of Economics
Principles of Microeconomics for AP® Courses
Economics
Transcript
18,000,000+
Students on Numerade
Trusted by students at 8,000+ universities
Watch the video solution with this free unlock.
EMAIL
PASSWORD