Unit 1 Quiz Submit 6 A market economy has several benefits, but it also has some drawbacks. What is one negative effect a market economy can produce? OA. It creates extreme divisions between the wealthy and the poor. OB. It lets many workers choose where they want to be employed. OC. Goods and services are only produced for uses planned by the government D. The lack of competition means that consumers have fewer choices Reset Next

A. It creates extreme divisions between the wealthy and the poor

Explanation:

The market economy is profits driven. The prices of goods and services, including essential goods, are set to generate profits for the producer. Only people with resources are able to acquire these goods.  

The market economy creates social inequities as those with fewer resources will always afford little. Meanwhile, owners of the factors of production continue making profits and growing more wealthy. Economies with a market economy will have people at both extreme ends of wealth; those with a lot and those who barely have any

the amount of money you earn by working is your income.

the percentage of people actively looking for a job is called unemployment.