Question

The chapter defines private enterprise as a characteristic of market-oriented economies. What would public enterprise be? Hint: It is a characteristic of command economies.

Short answer

Public enterprise is the ownership and operation of businesses by the government or its agencies in a command economy. Unlike private enterprises in market-oriented economies, which aim to make profits based on consumer demand and competition, public enterprises in command economies produce goods and services based on the government's directives to achieve specific economic, social, or political goals. Their main objective is to serve the public interest and meet the government's objectives, rather than to maximize profits.

Step-by-step solution

Define market-oriented economies and command economies

Market-oriented economies, also known as market economies, are economies where production and consumption decisions are guided by the forces of supply and demand. In these economies, private individuals and businesses make most decisions regarding production, distribution, and consumption of goods and services. Command economies, on the other hand, are economies where the government has central control over production, distribution, and consumption decisions. In a command economy, the government dictates what goods and services will be produced, how they will be produced, and how they will be distributed.

Define private enterprise and its relation to market-oriented economies

Private enterprise is a characteristic of a market-oriented economy. It refers to the ownership and operation of businesses by private individuals or organizations, rather than by the government. In a market-oriented economy, private enterprises produce goods and services based on consumer demand and competition. They aim to make profits and have the freedom to make their own decisions regarding production, distribution, and consumption.

Identify the counterpart of private enterprise in a command economy

In a command economy, businesses are owned and operated by the government or its agencies, rather than by private individuals or organizations. This concept is known as public enterprise.

Define public enterprise as a characteristic of command economies

Public enterprise can be defined as the ownership and operation of businesses by the government or its agencies in a command economy. In a command economy, public enterprises produce goods and services based on the government's directives, which are aimed at achieving certain economic, social, or political goals. Unlike private enterprises, the main objective of public enterprises is not to maximize profits but to serve the public interest and meet the government's objectives.