Market Systems
 

HOME

Topics

Scarcity

Economic Decisions

Market Systems

Ethymology

Law of diminishing returns

Monopoly

Mind Maps

Essay Questions

Refference

Economics Dictionary

Study Break

Counter Strike Online

Downloads

Donwload E-books and Articles

There are two system which answer the four economic questions. The Free market Economy, the planned Economy. In reality non of them exist, but to understand how private and government work together, we have to look at the elements and then look at the compound which is the reality. Closest to free market is USA and the closest to Planned market is North Korea


There are 5 or 6features which are actually one, that you have to remember for advantages and disadvantages of both systems. Now if you want full essay marks at least memorize 5 features.(To get high marks you have to understand and memorize )


  1. Factors of production are owned by who

  2. Systems aim

  3. Goverments role

  4. Who makes the decisions

  5. how the prices are set

  6. consumer satisfaction


So these are the main questions that should be asked and advantages and disadvantages of both Free market and Central market are from the questions above.


Free Market


Features:

  1. Factors of production are owned by private individuals

  2. It is profit motivated

  3. Government only sets the rules and doesn’t intervene

  4. Private individual makes all the decisions(the four questions)

  5. The price is set through price mechanism

  6. consumer sovereignity

Advantages