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When you go shopping, you usually find all the products and services you are looking for, at prices you are willing(a) to pay. In reality it is surprising that somehow the merchants of such large cities as New York, Los Angeles and Chicago know what products they should have in their establishments and in what quantities. Adam Smith, the father of the modern economy, described this situation by saying that the free-market economy operates as if an "invisible hand" (the price system) was directing it.
1. What is the process through which the free-market economy determines which goods and services should be produced?
2. And non-free market economies, how do they decide which goods to produce?
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