Discussion Question 1
DQ 1
Anita Sabillo
ECO 561
September 29, 2014
Dr. King
DQ 1
Explain how the market economic system works to answer the fundamental economic questions. Explain how this may differ from a command economic system. Historically, which has worked best and why?
There are three basic questions of economy and they are as follows: what to produce, how to produce it and who to produce it for. In a market economy, the organization is geared around producing or making the product and deciding what and how. Then the customer decides for whom when they actually purchase the product. This philosophy differs from a command economy because it’s the government – or a central command – that makes all of these decisions.
In a market economy, shy’s the limit. Anyone can enter into this economy and make it happen. One could really live the American Dream in this economy as there are no barriers. However, there are some draw backs. There are no guarantees of success. Also, because there are some shady people, there are no “checks and balances” when it comes to whether or not the person within the market economy is considering things such as social consequences; they are only thinking of their own success.
In a command economy, there is safety and security. The government makes most of the decisions as to who is employed and what gets produced. And they strive to make sure their decisions works for all involved. One of the drawbacks is that there are limits as to who, what, where, when and why when it comes to the product produced.
Historically, the market economy has worked best as freedom is what this country was founded upon. Life, liberty and the pursuit of happiness is a fundamental phrase coined from our history of allowing our citizens to go forward and become successful within our economy.
Reference answers.com. (2014). How do command and market economies help solve the economic problem? Retrieved from
Anita Sabillo
ECO 561
September 29, 2014
Dr. King
DQ 1
Explain how the market economic system works to answer the fundamental economic questions. Explain how this may differ from a command economic system. Historically, which has worked best and why?
There are three basic questions of economy and they are as follows: what to produce, how to produce it and who to produce it for. In a market economy, the organization is geared around producing or making the product and deciding what and how. Then the customer decides for whom when they actually purchase the product. This philosophy differs from a command economy because it’s the government – or a central command – that makes all of these decisions.
In a market economy, shy’s the limit. Anyone can enter into this economy and make it happen. One could really live the American Dream in this economy as there are no barriers. However, there are some draw backs. There are no guarantees of success. Also, because there are some shady people, there are no “checks and balances” when it comes to whether or not the person within the market economy is considering things such as social consequences; they are only thinking of their own success.
In a command economy, there is safety and security. The government makes most of the decisions as to who is employed and what gets produced. And they strive to make sure their decisions works for all involved. One of the drawbacks is that there are limits as to who, what, where, when and why when it comes to the product produced.
Historically, the market economy has worked best as freedom is what this country was founded upon. Life, liberty and the pursuit of happiness is a fundamental phrase coined from our history of allowing our citizens to go forward and become successful within our economy.
Reference answers.com. (2014). How do command and market economies help solve the economic problem? Retrieved from