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Introduction

Question
CBSEENEC12011803
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Distinguish between a centrally-planned economy and a market economy.

Solution
A centrally planned economy is one in which all economic decisions are taken by the government or central authority. Its main objective is to promote public welfare. A market (or capitalist) economy is a free economy in which all economic activities are organised through market forces of demand and supply through automatic functioning of price mechanism. Self interest is the main objective.

Some More Questions From Introduction Chapter

Explain central problems with the help of PP curve. How does PP curve help in explaining the central problems?

(i) Why is PP curve downward sloping from left to right?    (D 2006C)

(ii) Why does PP curve look concave to the origin? 

Can the PP curve shift?

State factors which cause rightward (upward) shift of PP curve.

 How is PPC affected by unemployment in the economy? Explain.

Massive unemployment shifts the PPC to the left. Defend or refute.

What is meant by resources?

What do you understand by the term 'individual' in economics?

What is meant by goods?

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