Economic Systems Essay

A command economy or planned economy is an economic system in which the government or authority has control over the production and pricing of good and services. The authority selects which items and services to produce, the creation and distribution process, and the costs of goods and services. Additionally, the government has control of all lands, capital and different resources. The government or authority decides essentially the most socially effective items to provide. They also create laws and regulations that control state-owned and privately owned businesses. The choice of goods available to customers is higher in the market economy system than in the command economy system. There are 2 types of Command Economy, a strong and a Moderate

Additionally, Centrally Planned Economies usually involve 2 types of government: Socialism which is a social and political philosophy based on the belief that democratic means should be used to distribute wealth evenly throughout a

A command or planned economy is a system economy where everything about economy is controlled by the government. This means that the government determines what kinds of goods and services to be produced, using a method or manner of goods and services will be made up and who will consume those goods and services. So that, a command economy, it is easier for the government to control the inflation, unemployment and other economic problems. Command economy is benefit for the society because the government seeks to provide for everyone and it maximizes social welfare.

What is the effect on the equilibrium price and equilibrium quantity of orange juice if the price of apple juice decreases and the wage rate paid to orange grove workers increases?

A command economy is well organized by government officials because they own and direct the factors of production, while market economies are not organized. Market economies are unplanned because they are determined by supply and demand of goods and services. Since government officials control the factors of production in the command economy it causes less unemployment, although there is no actual promotions and no one is praised for their work. There is more unemployment in the market economy because no one is equal, therefore everyone must do the best to provide for themselves and their families. Being successful in the market economy is about being able to be a good entrepreneur because the prices of items are determined by what sells and what does not sell.

Countries use different systems to regulate economic choices which may include command, market, traditional, closed economies, or even a combination of multiple. In a mixed market economy, such as the United Kingdom, individual citizens are granted the right to make their daily economic decisions without interference from the government. In contrast, China’s command economy is quite the opposite, with its economy completely controlled by the government and their actions. The

The significant difference between is whether government intervention of economy exists. For command economy, the state has the right for all economy decisions, including planning and adjusting. Properties are owned by the government. The other extreme situation is the free-market economy, where the government do not place any intervention. However pure command economy as well as free-market economy do not exist in the world that is also agreed by Samuelson (2010).

Command economies rely on the government to control and manage the business, while market economies rely on the work of individuals who make all the decisions for the business. To explain, command economies focus on the aspect of communism which is a system that the government controls all aspects of production, therefore, factors of production such as natural resources or capital is controlled by the government. Alternatively, market economies focus on capitalism which explains that individuals and businesses own the resources and are free to charge what they want for their products. Although, these prices are based on the supply and demand of the company. The individuals who run the businesses are in control of the factors of production as there is little to no government control on economic

Compare and contrast the characteristics of a market economy system vs a command economy system

To begin with, the major difference between a command economy and a market economy is that in a command economy, the government controls all aspects of the business with little to no say from the business owner. For example, in places such as China and Russia, the government answers the three economic questions that dictate who the market is, what to make, and how to make it. On the other hand, in a market economy, the business owner has the right to control all aspects of their business as long as they follow the guidelines set by the government that they chose. Additionally, by choosing the government officials in a market economy, the business owner is able to choose a representative that will best support their views. In closing, there are vast differences between a market and command economy such as in a market there is choice, where as a command is completely controlled.

In the economy world there are many different kinds but I will be focus on the most important. Command and market economies rule the world we live in today. A command economy is controlled by the government and they make every single decision for their workers. The workers do not have a say in what they can work in or do. Market economy is when people run their own business but government may promote competition to increase the production.

that are revamping the structure and formation of the working class as a whole and

A free market is a type of market that the government is not involved in. Since the government does not care about what happens, the free market is also called “hands-off” or “let it be economics”. The government is limited to protect the citizens from the danger and that is the major goal for the government. In the free market economy, there are three components of the free market economy: competition, active but limited government, and the self-interest. Competition is one of the main components of the free market economy. Competition means that the companies compete with one another to make more benefits to themselves. According to the concept of the free market economy, the competition means a good thing because it is a basic

The command economy is government directed. The market forces have very little say in such an economy. There is no private property. On the other hand, a command economy aims at using all available resources for developing either in advertising or marketing. In order to ensure that the required inputs are available, the state would probably conduct some form of input-output analysis. All industries act as the input from other industries and the producers act as the

This type of economy works in the private sector of business ie. Individual firms. A command economy is an entirely different system in which a central government decides how to answer the three central economic questions. The government would decide what is to be produced, how it is to be priced etc.