lpossibilities frontier 35. An economic system a. must answer the three economic

Question

lpossibilities frontier 35. An economic system a. must answer the three economic questions to the satisf b. must not allow some members of society to gain an unfa of everyone in society ir advantage when answering the three economic questions c. -d. must choose pure capitalism to adequately answer the three is a set of social institutions and mechanisms organized to answer the three economic questions e. can address problems of scarcity only by embracing the social institution of private property 6. A major distinguishing feature between capitalist and socialist (or command) economies is that under capitalism the average citizen is always wealthier than in socialist a. b. economies decision making is typically decentralized in socialist economies and is centralized in capitalist economies socialist countries all have red flags and capitalistic economies do not c. d. resources are publically owned in capitalist economies decision making is typically decentralized under capitalism while it is centralized in e. command economies The "invisible hand" described by Adam Smith refers to the a. b. c. d. e. 37. allocative role of markets and market forces importance of government intervention and central planning actions of successful entrepreneurs in directing the economy role of monopolized industries in leading the nation value of religious belief in creating an ideal economy

Explanation / Answer

35. The answer to the question will differ between different nations as the socio-political and economic conditions. But assuming we can generalise economic systems, the most probable answer will be A as it will take into the utility of all the stakeholders to answer the three economic questions. One's utlity is always some other's disutility and hence a balance of all stakeholders is needed.

36.Decision making is decentralised in a capitalist economy . Hence we can rule out B and option C does not make any economic sense.The eqiuitable distribution of still in question , so we can rule out option A. Option can also be eliminated because while capitalism is decentralised , sociaism is not centralised but is a more of community or group based decisions. So, Option D is the most relevant answer, as capitalist do involve in public IPO and hence transfer ownership rights to public.

37.Adam Smith is the notion that the economy has automatic adjustment mechanisms for ti reach full employment , reach equilibrium and move towards path of development. And Markets cretae the adjust mechanism through demand , supply price constraints.Hence, the answer is option A.

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