DEMAND AND SUPPLY THEORIES

Demand and Supply Theories



Demand and Supply Theories

Question 1; Compare and contrast a planned economy with a free market economy. Discuss why in reality most economies are mixed economies.

The Planned finances which is the economy that the government "organises" is very distinct from the Free Market finances where the private sector is in ascribe and owns companies etc... The planned finances is better in the sense that people are less worried due to not having to concern about their next meal or other, due to the government supplying their rudimentary needs like housing, health care, nourishment, apparel, education, a job, so no one is unemployed yet all get paid the same allowance more or less. People are not paid very much, perhaps 3 dollars per month, but it is all that is needed, countries like Cuba get most of their nations money from tourism, and still have fairly good public learning, a good transport system and it is said that they have very good health care, and persons in Cuba get all health care required for free including procedures and medicine (Friedman, 1962, 25-29).

Meanwhile in the free market finances their are very poor persons in the smaller classes that have absolutely no food and could starve to death, and the very wealthy that are to involved in themselves that they do not care about others.

but it is furthermore better because their is freedom of expression. You also get paid according to how hard you try and the effort you put into things. Their is a better allocation of resources because each business or firm tries to allocate resources in a better way due to competition, trying to produce either more at a better quality for a lower price or just trying to be better than somebody else, and selling your better quality goods. This is good because their is a variety of choices and better quality good than their would be in a planned economy because in a planned economy everything is the same for everybody.

The term mixed economy typically describes an economic system that combines the use of market and command mechanisms to guide economic activity. A mixed economy is typically considered a middle ground—a “third way”—between laissez-faire capitalism and state socialism. Virtually all evolved finances, including that of the joined States, fall into this category. Most modern manifestations of the mixed economy incorporate varying degrees of private economic activity, such as privately owned enterprises, and state regulation and control of the economy, such as social welfare programs, economic and industrial planning and development, and state ownership of economic enterprises. The modern welfare state is often viewed as a type of mixed economy, one that mitigates the vagaries and inequalities that arise in a free market economy (Richard, 2008, 21-25).

The literature on the mixed economy is vast. In economics, the contributions range from arguments defending the mixed economy, such as Japan's active role in industrial policy, to rejections of the “sickness” of the mixed ...