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

In conclusion, public enterprise is a characteristic of command economies and refers to government-owned and managed businesses that focus on providing essential goods and services to the public. This contrasts with private enterprise, which is a key feature of market-oriented economies and consists of privately-owned businesses that operate for profit.

Step-by-step solution

Understand Market-Oriented and Command Economies

Market-oriented economies are based on supply and demand with minimal government interference. This means that businesses are free to determine what to produce, how to produce, and for whom to produce based on market forces. In contrast, command economies are centrally planned economies where the government decides what to produce, how to produce, and for whom to produce. The government directs and controls all economic activities.

Define Private Enterprise

Private enterprise, a key feature of a market-oriented economy, consists of privately-owned businesses that operate for profit. They are owned and managed by individuals or firms, and their revenue is generated by selling products or services to consumers. The competition between private enterprises leads to efficiency, innovation, and improvements in overall living standards.

Define Public Enterprise

Now that we understand private enterprise, we can focus on defining public enterprise. Public enterprise, as the name suggests, is a characteristic of command economies. These enterprises are owned and managed by the government or state, and their main purpose is to provide essential goods or services to the public, rather than solely aiming for profit. Public enterprises may operate in sectors such as transportation, utilities, and healthcare.

Summarize the Answer

In conclusion, public enterprise is a characteristic of command economies. It refers to government-owned and managed businesses that operate with the main purpose of providing essential goods and services to the public, as opposed to private enterprises that focus on generating profit in market-oriented economies.