Question

Which of the following economic systems primarily relies on prices for allocating resources and goods?

A) Free-market
B) Traditional
C) Command
D) Mixed
E) Socialism

Answer 1

A) Free-market

Step-by-step explanation:

The free-market economic system primarily relies on prices for allocating resources and goods. In a free-market system, individuals and businesses are free to make their own economic decisions, and prices are determined by the interaction of supply and demand in the market. This price mechanism serves as a signal for resource allocation, as prices adjust according to the scarcity or abundance of resources and goods. As a result, resources are allocated based on consumer preferences and the willingness to pay, leading to a decentralized and efficient allocation of resources.

Answer 2

Free-market economic systems primarily rely on prices to allocate resources and goods, using the forces of supply and demand to signal and guide producers and consumers.

Step-by-step explanation:

The economic system that primarily relies on prices for allocating resources and goods is the Free-market system. In this system, prices are determined by the forces of supply and demand, without any government intervention. These prices, in turn, guide producers to allocate resources efficiently, and they also signal consumers about the cost and value of goods and services. An example of a country that predominantly uses the free-market system is the United States, although it also includes certain mixed economy elements.

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