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Hong Kong is basically a mixed economy, with most resources allocated by market forces but definitely not a pure market economy.

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Introduction

Hong Kong is basically a mixed economy, with most resources allocated by market forces but definitely not a pure market economy. In Hong Kong, most resources are owned privately and people are free to make production and consumption decision. However, the government also plays a minor role in Hong Kong's economy. For instance, national defense is administered by the government as only the government can afford to buy them. People do not pay for each unit they use but the government purchases it collectively for the entire nation. Providing national defense services to one individual does not mean there is less defense for others because all the people, in effect consume those defense services together. ...read more.

Middle

When the Rolex watches become more expensive, some customers will choose to buy fewer of them and more of its substitutes. With the rise in price, the seller may even earn more profits. Other producers also see the potential market in producing such watches. They stop making something else but produce more shirts to satisfy demand. Therefore, more resources will be attracted into such business and so resources are allocated in such way. All in all, individuals produce goods, which follow their own self-interest and provide them the highest return. As for the method of production, producers have to decide how to combine scarce inputs into production. ...read more.

Conclusion

As for the distribution of goods, goods are normally distributed to those who are willing and able to pay the price. Another way to distribute goods in Hong Kong is by auction. People who can better afford to pay will receive the good. Valuable land in Hong Kong is sold to the buyer who bids the highest price. In H.K., non-price criteria is also one of the ways which helps to allocate goods. For example, in Miss Hong Kong, goods are allocated to those with beauty. As for the receival of a senior citizen card, you have to reach a certain age. All in all, people in H.K. have a great deal of freedom and can do whatever they want as long as it is legal. ...read more.

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