The Food and Drug Administration (FDA) is part of the
federal government’s Department of Health and Human
Services. Among its other functions, the FDA evaluates the safety and effectiveness of drugs and medical
devices. FDA approval had to be granted before OraSure
was allowed to market its home HIV test. In a centrally
planned economy, the government decides how resources
will be allocated. In a market economy, the decisions of
households and firms interacting in markets allocate
resources. Briefly explain which statement is more accurate: (a) The regulation of the production and sale of drugs
and medical devices in the United States is an example of
how resources are allocated in a centrally planned economy, or (b) the regulation of the production and sale of
drugs and medical devices in the United States is an example of how resources are allocated in a market economy.