Imagine you are a consultant who has been asked to summarize thestrengths and weaknesses of Agoria, a nation with a pure marketeconomy.
Which of the following would you include in your report asweaknesses of Agoria's economy? Check all that apply.
- Occupational choices can be restricted.
- Firms have no incentive to produce the so-called public goods,such as national defense, because private firms cannot preventnonpayers from enjoying the benefits of public goods.
- People with no resources to sell could starve (income isdistributed unequally).
- The economy experiences economic fluctuations, which arealternating periods of expansions and recessions in their level ofeconomic activity, especially in employment and production.
