SOSC 1520 9.0 Markets & Democracy
Assignment 2: Reading questions
A K M Ziauddin Chowdhury
216659179
1) Why is a centrally planned economy sometimes called a "command economy"? (1 mark)
(Word limit: 25)
The reason it is sometimes called command is that compared to a market economy, in a
planned one people are instructed what to do to a far greater degree (Peacock 2017, p. 151).
2) What is the role of freedom in a capitalist economy? (1 mark) (Word limit: 50)
According to Marx, the role of freedom is to do with the determination of division of labour.
This is due to the decisions of millions of people who have the freedom to choose what job
they will do. This allows a decentralized and uncoordinated way of allocating people to the
job. (Peacock 2017, p. 152)
3) Explain the role of trial and error in a capitalist economy. (1 mark) (Word limit: 50)
Trial and Error has the role of determining the quantity of the products that will be
produced. It helps with correcting the oversupply or undersupply of a good according to the
demand of the product. This helps contribute to the self-correcting nature of the market
economy. (Peacock 2017, p. 153)
4) How does market competition resemble the playing of a game? (1 mark) (Word limit: 75)
According to the text the market competition is also like a game. This is because like a game
everyone wants to win or get better of their competition in the market. Secondly before the
game know one knows who will win just like no one knows who will do the best in the
market. Both the game and the market are quite unpredictable, the outcome of both is tied in
with chance or luck as well. (Peacock 2017, p. 155)
5) Explain the term “division of labour in society” or “social division of labour”, as it is also
called (1 mark) (Word limit 75).
A social division of labour is the result of the decision of the many independent producers.
In theory division of labour is dividing the work process into different tasks, with each task
being carried out by a different person. However, this sort of division of labour is addressed
as internal division of labour in the text. It is basically relying on a particular producer to
provide a particular product to the economy to put into social context. (Peacock 2017, p.
158)