Question

Which of the following is NOT an example of a how a market economy is organized?

a. Despite the advice of its business partners, Puma discontinues its most popular lines of clothing, and chooses instead to produce retro jean jackets and purple sweatpants, thinking that jean jackets and sweatpants are bound to make a fashion comeback.
b. North Korea decrees that rice must be consumed at all meals in an effort to help domestic rice makers.
c. Dove decides to introduce a soap scent, Pomegranate, in response to Ivory's new soap scent, Blood Orange, and Olay's award-winning scent, Tangerine.
d. For their wedding, Alex and Erika choose Matte Photography instead of Pro Finish Photography, since Matte Photography is cheaper.

Answer 1

The option that is NOT an example of how a market economy is organized is the one about North Korea's decree on rice consumption, as it reflects centralized, government decision-making typical of a command economy.Correct option is b.

Step-by-step explanation:

The question asks which of the provided options is NOT an example of how a market economy is organized. In a market economy, the organization is decentralized, and private individuals and firms largely dictate economic activities, such as production levels, pricing, and entry into or exit from the market.

Essential characteristics include the ability for private entities to engage in business decisions that lead to competition, product differentiation, and mergers, among others.

Considering this, the response that doesn't align with a market economy's organization is North Korea decrees that rice must be consumed at all meals in an effort to help domestic rice makers. This reflects a command economy where the government makes decisions for the market, contrasting sharply with the decentralized decision-making process intrinsic to market economies.