- Created by: alexisschildd
- Created on: 20-05-19 19:19
Good example- UK/Europe
Mixture of government intervention and private enterprise
-People have choices
-Government intervenes to prevent market failure
-Funding for public/merit goods can be less than needed
-Market Failure can still occur.
Free Enterprise (Market) Economy
Good example- US
Driven by demand
Advantages;- Entrepeneurs fit well into this.
-Demanded products have larger supply.
Disadvantages;- Unequal wealth distribution
-Less care of environment e.g higher pollution
-Poor suffer, rich benefit
Good example- Russia
Heavily based on Demand
- Government chooses who produces and what is produced.
- 5 year plan;
Advantages;- Strong government makes sure public/merit goods are consumed at the right level.
-Government can control goods/services for the good of the country
Disadvantages;- Unable to efficiently allocate goods
-Shortages or surplus
-Wages fixed, no choice for work
-5 year plan too long as things can change quickly.