An economy is transitioning from a centrally planned (command) system to a free market system. Which of the following is most likely to occur as a direct result of this structural change?
Consumer sovereignty will decrease as resource allocation is decentralized to private firms.
The price mechanism will assume a greater role in determining the allocation of scarce resources.
The distribution of income will become more equitable due to the elimination of administrative wage-setting.
The fundamental economic problem of scarcity will be resolved due to the allocative efficiency of private enterprise.
22 exam-style questions on Edexcel A A Level Economics 1.1.6 Free market economies, mixed economy and command economy. Each one has a worked solution and a mark scheme showing where the marks go.