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.
85 exam-style questions on Edexcel A A Level Economics 1.1 Nature of economics, covering 1.1.1 Economics as a social science, 1.1.2 Positive and normative economic statements, 1.1.3 The economic problem, 1.1.4 Production possibility frontiers, 1.1.5 Specialisation and the division of labour, and 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.