What kind of economy offers the same wage no matter how productive a person is?

Study for the VirtualSC Economics Honors Exam. Utilize flashcards and multiple-choice questions, each with hints and explanations. Get prepared for your exam!

The correct answer is found in the characteristics of command economies. In a command economy, the government or a central authority makes all decisions regarding the production and distribution of goods and services, including labor compensation. As a result, wages are often standardized and set by the government without regard to individual productivity levels. This structure aims to eliminate income inequality and ensure that everyone receives the same compensation regardless of their contribution to the workforce.

In contrast, market economies are driven by supply and demand, leading to fluctuating wages that correspond to individual productivity. Mixed economies combine elements of both market and command systems, allowing for some level of wage variation based on productivity. Traditional economies are often based on customs and may involve barter systems, but do not typically feature a standardized wage structure either. Therefore, in a command economy, the uniformity of wages regardless of individual output distinguishes it from the other economic systems.

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