Lecture 3 Flashcards
(3 cards)
1
Q
What is a centrally planned Economy?
A
An Economy in which a government bureaucracy decides how much of each good to produce how to produce the goods and who gets the goods
2
Q
what is a market economy?
A
A market economy is an economy in which decisions regarding investment, production, and distribution are based on supply and demand, and prices of goods and services are determined in a free price system.
3
Q
What is the comparative advantage?
A
The ability of one person or nation to produce a good at a lower opportunity cost than another person or nation
