Which of the following best describes how consumers make financial decisions in a market economy? A. The media forces consumers to buy certain goods. B. They make choices based on their self-interests. C. The government tells consumers what to do. D. They always buy items that are the least expensive.

Question

Andres Jensen

Business

16 January, 10:02

Which of the following best describes how consumers make financial decisions in a market economy? A. The media forces consumers to buy certain goods. B. They make choices based on their self-interests. C. The government tells consumers what to do. D. They always buy items that are the least expensive.

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Answers (1)

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Abagail · Answer 1

B. They make choices based on their self-interests.

Explanation:

A market economy can be defined as the economy of a country where by the government has a minimal influence or intervention on how the market operates.

A market economy is regulated by the individuals that owns the businesses in that economy. These individuals have the ability to direct resources that they need from production to their firms and businesses.

A market economy is largely or greatly influenced and regulated by the rate of supply and demand. Consumers in a market economy have to sometimes paid a high price for the goods and services that they require. Consumers make financial decisions in a market economy by making their choices based on self interests.

A market economy is a very competitive economy because

a. the demand of goods and services by consumers have increased therefore this results in an increase in production of goods and services.

b. The producers tend to high innovative when producing this goods and services required by the consumers.

In a market economy, businesses and firms tend to have an increased of a very high rate of efficiency when producing goods and services such that they minimise or lower the cost of production while ensuring that they make high or huge amounts of profits.