Which of the following correctly describes how the allocation of resources differs between a pure command economy and a mixed economy?
In a pure command economy, the state uses indirect taxation to alter the price mechanism's allocation of resources, whereas in a mixed economy, the state directly sets all prices and output levels.
In a pure command economy, resource allocation is determined entirely by state planning and administrative directives, whereas in a mixed economy, resources are allocated through a combination of the market price mechanism and government intervention.
In a pure command economy, resources are allocated solely to maximize consumer sovereignty, whereas in a mixed economy, resources are allocated to maximize state tax revenue.
In a pure command economy, the allocation of resources is guided by the signalling and incentive functions of prices, whereas in a mixed economy, prices serve no allocative function.
