Question

10. When you look at the economies of the United States, Europe, or Japan, you see most of the ingredients of a market economy. For example, consider bicycles. Prices in the bicycle market are free to vary; people have property rights to the bicycles they buy; many people sell bicycles; many bicycles sold in the United States, Europe, and Japan come from other countries; the government regulates bicycle use (no bicycles on the freeways, for example); and bicycle production takes place within firms with many workers. Replace bicycles with another good or service of your choosing and comment on whether the statement is still true.

Answer 1

Instead of Bicycle, we can take cakes, cookies, any grocery item. We can take Cars or any other thing we have in the market. The market in the US, the UK and Japan provide complete freedom for the people to produce and consume the items to their liking.

Prices of Cakes are free to vary, at the time of Christmas they are costly and in some part of the year they are cheap. Many people sell cakes even we have cake designers who specialize in decorating them, Here because the cakes do not possess any danger to people they are not regulated by any laws. We produce it in a lot of bakery firms around the country.

Yes, all the statements still hold true. Ina free market we are free to produce and consume anything we want and the way we want.