ASSIGNMENT

Assignment

Table of Contents

INTRODUCTION3

ANALYSIS5

PI: Stakeholder Objectives & Corporate Strategy5

Mission5

P II: Impact of Social Welfare and Industrial Policy Initiatives8

How are resources allocated under a market mechanism?9

How will it be produced?10

What is to be produced?11

How will it be produced?12

For whom will it be produced?12

Advantages of a planned economy:12

Characteristics of a mixed economy:13

P III: Relationship between Market Forces and Organizational Responses14

P IV: International Trade16

CONCLUSION17

REFERENCES19

Assignment

Introduction

Each society gives the three basic questions different answers, but the economic system of an economy is further determined by the resource ownership(who owns the resources and how owners are paid) and the extent to which the government attempts to coordinate the economic activities in that society.

The U.K. economy is made up of three basic institutional structures, the private sector, the public sector, and the international sector. Private sector consists of private individuals including households, independently owned firms that exist to make a profit and non-profit organizations. Public sector is the government and its agencies at all levels. International sector discusses the part of the economy that deals with imports and exports. Go ahead reading for a little more details.

Ranging from the most free to the most regimented type of economy, the market system or the free market is at the opposite end of the spectrum while command system is at the other end. They are the most typical types nowadays, but other mixed and transitional economies also pervade. Practically, no pure market system or pure command system exists today, all countries are at one point of the spectrum that's neither of the extremes. However, for sake of discussion, let's pay more attention to the extreme ones.

Under pure market system, resources are absolutely privately owned and the coordination of economy is ultimately based on the sum total decisions of millions of individuals who pursue their own self-interest without any central direction or regulation. Government is left out, and the market is the exclusive central institution in which the three basic questions are answered. Buyers and sellers of goods and services, resource owners and bidders interact in no way affected by other force like the government regulation. Their decisions are dependent only on the interest of their own. Consumers dictate what is produced(or the consumer sovereignty) and producers have to produce the goods and services people want, so is the resources allocation process. The distribution of output is also determined in a decentralized way. The amount that any one household gets depends on its income and wealth. The income and wealth are determined by their capabilities and skills as well as the choice whether to go to work or not. In a word, in a pure market system, while non-government members of the society determine their individual actions, they ultimately determine the whole economy.

Not only the U.K., but also many other countries have become more and more serious about the international sector of their economies, especially since the great economic lessons of the 1970s and 1980s when all economies, regardless of the sizes, depend to some extent on other economies and are affected ...