Question

State the economic system represented in the above picture and explain the reason for your answer. (3)

Answer 1

The economic system represented in the above picture is a free market economy. This is evident from the presence of various different businesses and vendors selling their goods and services in a market setting. In a free market economy, businesses are able to compete freely without government intervention, prices are determined by supply and demand, and consumers have the freedom to make choices based on their individual preferences. The picture shows a bustling marketplace with a variety of products being sold, which is characteristic of a free market economy where individuals are free to buy and sell goods and services based on their own self-interest.