Question

Match the items in the left column to the items in the right column.

1) 1. command economy - economy where goods, services, and resources are distributed by the government
2) 2. free market economy - economy where goods, services, and resources are distributed by price
3) 3. price - monetary cost of an item
4) 4. standard of living - level of comfort that people feel when goods and services are available to them
5) 5. wage - amount that a person earns for working expressed in a unit of time, like $9 an hour

Answer 1

A command economy is characterized by government control over economic activities, including production and wage-setting, while a free market economy is driven by supply and demand with minimal government intervention. Prices in a free market reflect the monetary cost of items, influencing consumption and production decisions, and these factors contribute to the standard of living.

Step-by-step explanation:

In the context of economic systems, the command economy is where the government has significant control over the production and distribution of goods and services. This includes decisions about the types of goods and services that will be produced, the prices charged for them, the methods of production, and the wages that workers receive. Free market economy, on the other hand, is guided by the principles of supply and demand where prices are determined by private transactions between buyers and sellers. The price of an item reflects its monetary cost, which influences the behavior of consumers and producers in a market. The standard of living is often linked to the availability and affordability of goods and services in an economy, which can vary greatly between command and free market economies.