Three basic economic questions would be:
- Using limited resources, should a local government build a new school or improve roads?
- How much pollution should be allowed?
- Who gets a flu vaccine?
How would you answer these questions?
It's possible to answer these questions in two ways: in command administration, the government decides both how coffers are allocated and how products and consumption are allocated.
A market economy is a system in which private coffers—established by property rights—and factors of production and consumption are coordinated by requests. By determining prices in requests, funds are assigned to their most productive use. In most cases, these prices serve as a signal for both buyers and merchants.
Hope this helps :)