To: the two monkeys.. Sya and Daniel.. Both of u owe me big time.. lol...

Economiscs Essay: June 2001

a)
~ Market economy, no government intervention.
~ Price depend on supply and demand conditions
~ Called the price mechanism

~ exisitince of consumer soveriginty.
~ consumers have a right to decide.

~ Presence of competition
~ Research and development
~ so economic growth

~ But wide gap between rich and poor
~ No public goods provided.
~ Rich become rciher, poor become poorer
~ Cos governmet do not help make sure poor have basic essentials

~ Existence of unemployment.
~ uneven distribution of income

~ Externalities not taken in to consieraton
~ negative and positive
~ positive: education
~ negative: poolution


b) ~ price control: command economy
~ prices determined by government
~ not supply and demand conditions or price mechanism

~ Advantage: No differnce betwen both poor and rich
: Both can try afford product
: more fair 4 both parties.


: government will account 4 externalities.
: positive and negative.
: public goods provided

~ Disadvantages: No comepetition
: everythng decided nt government
: country not attractive
: slower economic growth


: no research development
: so products may not be up to standrd, quality.
: not atractive enough


: problem when country shift from coomand economy to market economy
: companies may not be able knw how make decisions according maket conditions
: Depended too mch on government
: inefficieny, lack of skills, slower progress



* Copyright -shantini-* ( the above information may be false.. i left my notes in school and use my memory.. lollol... copy at ur risk...)