Question

There is a connection between the type of political system a country uses and its economic growth and stability. For example, when farms and factories are collectivized (that is, taken under government control instead of individual ownership) output levels plummet, causing rising prices. Here you see the demand curve for food. Using the line tool, draw two supply curves. The first measures the supply of food produced in a capitalistic democracy. Label it Supply 1. The second measures the supply of food produced in a collectivist system. Label it Supply 2.

Answer 1

ans.....
In countries with collectivization in agriculture, there is an increased production on the account of more collective farms operative under the government, Hence the supply curve for such an economy should be constructed to the right of a capitalistic one. It should be an upward sloping curve reflecting a postive relationship between price and quantity but the elasticity is higher than the supply by capitalist.