Question

Which of the following would be considered a disadvantage of allocating resources using a market system?

• A. Income will tend to be unevenly distributed.
• B. Significant unemployment may occur.
• C. It cannot prevent the wastage of scarce economic resources.
• D. Profits will tend to be low.

Answer 1

The correct option is A Income will tend to be unevenly distributed.

Since income is always somewhat unevenly distributed which give rise to economic divide. In market system resources are allocated with the objective of maximisation of individual profits which leads to further uneven distribution of income.