Multiple Choice
Which type of economic statement is illustrated when the government decides what is produced, along with how much is produced?
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0. Basic Principles of Economics
Positive and Normative Analysis
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In terms of production, socialism advocated for:
A
private ownership and market-driven allocation of resources
B
production decisions based solely on consumer preferences
C
centralized planning and public ownership of resources
D
minimal government intervention and laissez-faire policies
Verified step by step guidance1
Step 1: Understand the key concepts involved in the problem. Socialism in terms of production typically emphasizes public ownership of resources and centralized planning rather than private ownership or market-driven allocation.
Step 2: Identify the options given and analyze each in the context of socialism: private ownership and market-driven allocation aligns more with capitalism, not socialism.
Step 3: Production decisions based solely on consumer preferences reflect a market economy where supply and demand dictate production, which contrasts with socialist planning.
Step 4: Centralized planning and public ownership of resources is the hallmark of socialism, where the government or community controls production and resource allocation.
Step 5: Minimal government intervention and laissez-faire policies are characteristics of a free-market economy, not socialism, which involves significant government control.
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