• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Analyse the mixed Market economy and determine how effective it is in allocating resources.

Extracts from this document...


Analyse the mixed Market economy and determine how effective it is in allocating resources. According to Collins Dictionary of Economics, a mixed Market economy is "a method of organizing the economy to produce goods and services. Under this economic system some goods and services are supplied by private enterprise, and others, typically basic Infrastructure goods and services such as electricity, postal services, water supply, are provided by the State." The mixed market economy follows the Adam Smith's philosophy that one must "let the economy operate according to natural laws". This is also known as the "laissez-faire" theory, which the market economy follows, but the major set-up which it operates is related to the self-interest of the individual, which includes the aim of one getting the most profit as possible. ...read more.


This is definitely another advantage of the economy, because in parallel, people are able to achieve a higher standard of living. Lastly, there is a limited role for the government in a market economy, and this definitely offers many advantages to the system. The government is only allowed to regulate firms (to make sure there are no monopolies, which means that there is more chance to have a higher income), to tax and spend (meaning that in the end, the individual gets the luxury of welfare), and to legislate certain issues (such as determining a minimum wage law, which ensures that one will have enough money for the bare essentials). All of these factors then combine with others, such as the price mechanism to create a very successful form of economy, that the majority of the world is pleased with. ...read more.


In other words the price system in market systems improves the allocation of scarce resources. The allocation in mixed market economies is very effective because not only does it respond to the demand of the consumers but it also ensures that the resources are used as efficiently as possible. History has proven that a mixed market economy is the most successful market system. The aim of each country is to get as close as possible to its production possibility frontier, because I want a higher standard of living. As seen in the past, Soviet Russia had no unemployment; The U.S.A allocated his resources much better than the Soviet Russia and achieved a much higher standard of living. This was because the U.S.A. had an enterprise spirit, adapted the free market economy and people were risk taking. Sources Used * Collins Dictionary of Economics * Introductory Economics by GF Stanlake and SJ Grant * Economics A new Approach by A.G Anderson * Economics from a global perspective by Alan Glanville. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our GCSE Economy & Economics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related GCSE Economy & Economics essays

  1. The mixed market economy and the allocation of resources.

    also just imperfect human beings who naturally cannot detect demand with sufficient accuracy, because there are no signal such as prices(wikipedia encyclopedia) in addition they think that demand of necessary is fixed so the supply needs to be fixed and therefore it exists just one equilibrium, but in reality it is not the case.

  2. Hong Kong is basically a mixed economy, with most resources allocated by market forces ...

    Like, nowadays writers no longer write out their own work but type them out for publication, which increases efficiency and saves time. Division of labour is also a common method of production in H.K. As workers specialize in jobs which they are most suitable, productivity is raised.

  1. Assess which type of economic system is most effective in allocating scarce resources?

    Command economies can also be called centrally planned economies, as a country's government, not being satisfied with the efficiency and/or fairness of allocating resources, has there decided to do all the planning itself. This seems to be quite a good goal, as their aim is to allocate resources and distribute

  2. The mixed market economy.

    One advantage of the Market Economy is that consumers and suppliers have freedom of choice. But the most important advantage in the Market Economy is the price mechanism, which determines the allocation of resources efficiently. The price mechanism, as shown in diagram 1, includes the demand curve D and the

  1. Assessment of the market economy system

    However, in real life, problems will occur due to imperfect competition. One distinct example is monopoly. If a monopolist controls over the factor of production, for instance all the raw material, it can deny access to the new rivals. As there is only one firm in the area, it has

  2. Chinese economy sets for soft landing in 2005.

    Others believe that cooling down the economy remains the more urgent task currently. China has taken a raft of measures, including raising bank reserve requirements and administrative measures such as imposing strict land controls and credit curbs, to contain fast growth in fixed investment and money supply that started in the latter half of last year.

  1. The Quest for Optimal Asset Allocation Strategies in Integrating Europe.

    Time-series of average correlations are actually found to show a 'U' shaped pattern, with the global economic and financial integration achieving comparable levels around the beginning of the 20th Century to what we have today (also noted by Obstfeld and Taylor (2001)).

  2. Japan - the second largest market economy in the World?

    However, in Japan, industries enjoyed the asset inflation and neglected to tackle for competitive capabilities. The market with remaining regulation seemed to be less attractive for international business. 3.1.3 Weak entrepreneurial spirit Japanese business leaders tend to have the sense of "yokonarabi" (herd instinct)

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work