Explain how may differ from a command economic system
Q-1 Explain how the market economic system works to answer the fundamental economic questions. Explain how this may differ from a command economic system. Historically, which has worked best and why?
Q-2 Explain how a market economy compensates for a market surplus. What about a market shortage? Why is price driven toward equilibrium? How does the relate to laissez-faire. What are some factors that may cause the market system to not function effectively?
Q-3 Explain a production possibility curve. Differentiate between points on the curve, points outside the curve, and points inside the curve. How does this related to opportunity cost and scarcity?
Q-4 Different products have different demand elasticity–Define elasticity. Heart medication, for example, is inelastic and corn is elastic. Find a product that has not already been selected and describe the price elasticity and income elasticity. How much control might an organization have over pricing based on a product’s elasticity? Discuss which of the elasticity rules you used to determine your answer
