Exam 2: Markets and Economies

All goods, services, and resources are allocated based on their price, and those who value them the most pay that price. This best describes what economic system?

The figure below shows an incomplete circular flow diagram. Complete the figure by filling in the missing labels. ​ ​

An economy in which economic decisions are based on precedent is known as a _____ economy.

Explain why innovation tends to be more common in market economies than in command economies.