Question

Canada has a market economy. As such, Canada's economy (relative to centrally planned economies) tends to result in:_______.

A. equity but not necessarily productive efficiency or allocative efficiency.
B. allocative efficiency and equity but not necessarily productive efficiency.
C. allocative efficiency but not necessarily productive efficiency or equity.
D. productive efficiency and allocative efficiency but not necessarily equity.
E. productive efficiency but not necessarily allocative efficiency or equity.

Answer 1

Canada's market economy tends to result in productive efficiency but not necessarily allocative efficiency or equity. Productive efficiency means producing goods and services at the lowest possible cost, while allocative efficiency refers to allocating resources to meet society's preferences.

Step-by-step explanation:

Canada's market economy tends to result in E. productive efficiency but not necessarily allocative efficiency or equity.

Productive efficiency means that Canada is producing goods and services at the lowest possible cost. This allows for maximum output with minimum resources. However, productive efficiency does not guarantee that the goods and services being produced are allocated in the most socially desirable way.

Allocative efficiency refers to the allocation of resources to meet the preferences of society. In a market economy like Canada's, resources are allocated based on consumer demand and market prices, which may not always align with society's desired outcomes in terms of equity.

Answer 2

D. productive efficiency and allocative efficiency but not necessarily equity.

Step-by-step explanation:

Market Economy in which price and production of goods and services are managed by privately owned business in the market. Prices and production are drived by supply and demand of the product. The good and services are produced under this economy are at low cost. The last unit of production under market economy provide a marginal benefit to consumers equal to the marginal cost of producing it. Markets tend to be more efficient because they promote competition and facilitate voluntary exchange.

Centrally Planned Economy under which government take decision on production and distribution of good and services. It is all in the control of central authority. Central planned economy are not very efficient one in producing quality products for every citizen. Under this economy, generally standard of living is very low.

Canada is the 10th largest economy of the world with the GDP of $1.8 trillion. It resemble US´s market oriented economy. Canada has more petroleum reserve that middle east and it has low healthcare cost, which is half of the cost per capital of US.