Which of the following is true of a market economy? the government determines what and how much is produced and consumed. firms and households rarely interact in the marketplace. open competition between self-interested sellers advertising to self-interested buyers adversely affects product availability. the role of information is negligible with regard to buying decisions. people and firms pursue their own goals.

The answer is: People and firms pursue their own goals.

Explanation:

Theoretically, in a pure market economy (free enterprise or capitalism), both consumers and producers act freely and selfishly.

Consumers are willing to buy the things they can afford and that satisfy their needs, without any type of government intervention.

Producers will produce all the goods and services that consumers are willing and able to buy. No products or services would be considered illegal.  

No economy in the world is a pure market economy, simply because governments exist and laws regulate how the economy should work and its citizens should behave. Governments do this by taxation, tariffs on imports, income distribution, classification of illegal products and services, etc.

Some economies tend to be more market friendly (e.g. US economy) while others tilt towards communism or more government control (e.g. North Korea).

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