--%>
Assignment Help - homework help

Market system & a command economy try to cope with economy

Contrast how a market system and a command economy try to cope with economic scarcity?

E

Expert

Verified

A market system allows for the private ownership of resources and coordinates economic activity through market prices.  Participants act in their own self interest and seek to maximize satisfaction or profit through their own decisions regarding consumption or production.  Goods and services are produced and resources are supplied by whoever is willing to do so.  The result is competition and widely dispersed economic power.

The command economy is characterized by public ownership of nearly all property resources and economic decisions are made through central planning.  For each enterprise the planning board which is appointed by the government determines production goals.  The division of output between capital and consumer goods is centrally decided based on the board’s long-term priorities.

   Related Questions in Business Economics

  • Q : Numbers of sellers in pure competition?

    numbers of sellers in pure competition?

    		•
  • Q : Use of human and material resources

    What are the merits of speciality in the use of human and material resources?

    		•
  • Q : Fixed or managed exchange rate

    Question: A country with a fixed or managed exchange rate would consider i.___________________ its currency to gain competitive advantage vis-à-vis its trade

    		•
  • Q : What are the major provisions of GATT

    What are the major provisions of GATT

    		•
  • Q : Way to determine nature price of Adam

    “Natural price” by Adam Smith of a good was eventually determined through: (1) the amount of capital used within production in the short run. (2) long-run average costs of production, that Adam Smith believed to be the amo

    		•
  • Q : Good economic policy requires good

    Explain the statement: “Good economic policy requires good economic theory.”?

    		•
  • Q : Why businesses are not really free to

    Why businesses are not really “free” to produce what they wish?

    		•
  • Q : Production possibility frontier

    Question: Scenario: You have been hired as the economics adviser for the newly elected State Premier. On your first day, the Premier introduces you to the new Minister for Health

    		•
  • Q : Determine the lowest average wages

    Consider a huge group of identically smart and strong industrious workers. All else identical, Adam Smith would predict such that the lowest average wages would be earned through the workers who were in the work that: (1) had the leas

    		•
  • Q : Surpluses in the balance of trade The

    The advocates of laissez-faire policies favor: (i) Govt. control of economy. (ii) Public ownership of all the resources. (iii) Income to be distributed according to requirement. (iv) Surpluses in the balance of trade. (v) Minimal govt. intervention in economy.