StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

Comparative Analysis of Free Market Economy and Mixed Economy - Essay Example

Comments (0) Cite this document
Summary
This essay compares and contrasts main characteristics of free market economy system and mixed economic system. The economic system is considered as an organized way of distributing resources in a particular state by the government. There are four commonly-accepted types of economic systems.
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER96.6% of users find it useful
Comparative Analysis of Free Market Economy and Mixed Economy
Read Text Preview

Extract of sample "Comparative Analysis of Free Market Economy and Mixed Economy"

Download file to see previous pages The essay “Comparative Analysis of Free Market Economy and Mixed Economy” highlights main advantages and limitations of the two prevailing economic systems in a modern world. An economic system comprises the configuration of institutions and organisations that specify property relations within a given society or that channel and influence the distribution of goods and services.
In a traditional economic system, there is no control and everyone can produce goods for themselves. The countries which follow this economic system have low GDP and they have high government regulation of business. On the other hand, a planned economic system is the one where all economic activities are planned by the government of the day. The government has the overall say in how businesses should operate.
A free market economy is defined as “a market without any regulation. In other cases it means markets in which prices are free to reflect supply and demand. Sometimes it means competitive markets free of monopoly or concentration. In a free market economy system, individuals are encouraged to produce and make gains for themselves and the economic system is driven by profit motives. It can also be seen that price mechanism determines the allocation of resources. For instance, the law of demand and supply comes into play. A free market economic system has its own limitations
A mixed economy is regulated and its performance is mainly determined by the economic policies promulgated and implemented by the government.
...
It can also be seen that price mechanism determines the allocation of resources. For instance, the law of demand and supply comes into play. Basically, in a free market economy, the quantity of products offered in the market is mainly determined by the amount of price the consumers are willing to pay. Kotler and Armstrong (2004) state that the price people are willing to pay for a certain commodity correlates with the quantity of goods supplied. In economics, the law of demand and supply states that the price of the product shapes the quantity of goods that can be produced at a particular period. This law goes on to state that the higher the price, the higher the goods the producers are willing to supply (Benassy, 1988). High price means high supply of products and this entails that high profits are likely to be generated. On the other hand, a mixed economy is a combination of a free market and planned economies. A mixed economy is regulated and its performance is mainly determined by the economic policies promulgated and implemented by the government. To a certain extent, it can be seen that a free market economy is effective compared to a mixed economy. According to Pryor (2006), countries with a business-oriented or free market economic system have a significantly higher rate of economic growth. The main reason for this is that they can generate more revenue from free trade taking place. Unlike in a regulated economy, a free market economic system is liberal and the flow of money is not restricted. In a free market economy, the consumers have a variety of choice of goods offered since the manufacturers of these commodities are mainly concerned with satisfying the needs of the customers. As long as the consumers are willing to pay the price, ...Download file to see next pages Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Comparative Analysis of Free Market Economy and Mixed Economy Essay”, n.d.)
Retrieved from https://studentshare.org/macro-microeconomics/1493362-comparative-analysis-of-free-market-economy-and-mixed-economy
(Comparative Analysis of Free Market Economy and Mixed Economy Essay)
https://studentshare.org/macro-microeconomics/1493362-comparative-analysis-of-free-market-economy-and-mixed-economy.
“Comparative Analysis of Free Market Economy and Mixed Economy Essay”, n.d. https://studentshare.org/macro-microeconomics/1493362-comparative-analysis-of-free-market-economy-and-mixed-economy.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Comparative Analysis of Free Market Economy and Mixed Economy

Free Market Economy

...?The term free market economy mainly means a system where land and capital are privately owned and the buyers and sellers are solely responsible for all economic decisions. The free market economy is usually associated with a pure capitalist system where prices influence the allocation of goods and services. In this kind of market, importance is placed on the freedom of the consumer and the worker, and the firm itself. The fact that a free market economy operates automatically is one of its major advantages. Moreover, when firms, consumers and workers pursue their own self interest through buying and selling in competitive markets, it helps in minimizing the central economic problem of scarcity, by encouraging the efficient use...
5 Pages (1250 words) Essay

Housing in a Free Market Economy

...?Topic: Why should the intervene in housing in a free market economy? How far do current policies for housing finance reflect these justifications? Use supply and demand diagrams and the material taught on the course in welfare economics to support your answer. Identify the practical considerations for the design of a housing organisation’s business plan. Introduction With the end of the housing blast of the past decade, the UK government under Gordon Brown wants to energise the housing sector of the economy. The government’s interference in housing and its authenticity in playing a role in the housing market through its policy initiatives is being seen doubtfully by experts as they perceive the ups and downs of the market functioning...
12 Pages (3000 words) Essay

Free Market Economy

.... Most notable, is the fact that in the free market system represents economic freedom for all customers (Friedman & Friedman, 2002, 15). The chart below (chart 02) is the evidence for the worldwide support of free market system. Chart 02. Shows the worldwide support for free market. Source: Global Scan (2012) There are other market systems other than the free market system. They include mixed economy, and command economy. Mixed economy is a market system involving the economic system where both the government and the private sector are all involved in directing the economy. This reflects the market and planned economies characteristics. Diagram 06 illustrates movement of goods and services in a mixed economy. Figurer 06 shows movement...
12 Pages (3000 words) Research Paper

Managing in a mixed economy

...?Managing in a Mixed Economy Executive Summary This study deals with Private-Public Partnership (PPP) agreement between London Underground and Mertronet. The purpose of the PPP agreement was to acquire funds from the private sector. This paper begins with the background of London Underground and Metronet. Historical facts are also provided to understand the reason for selection of PPP as a means of financing. It also contains literature survey of the problems of London Underground and Metronet also the National Audit Office Report is presented. The paper has been concluded with a few causes and reasons for the London Underground failure and liquidation of Metronet and is followed by the recommendation for the improvement of the PPP...
12 Pages (3000 words) Essay

Ethics in Free Market Economy

...Ethics in business Free markets allocate economic goods in the most social and beneficial way and ensure progress. This paper discusses about how free markets operate in an economy for the betterment of society. Let us take a view on social justice and how a free market tends to carry it. Social Justice Justice is fair allocation of costs and rewards in a group membership. Social justice process refers to the way a group allocates costs and benefits of membership. Social justice issues related to costs of group membership can come up in any size of a group. Benefits of group membership are also allocated through social justice mechanisms. There are certain distributive principles of social justice out of which Neo-liberal or Libertarian...
10 Pages (2500 words) Research Paper

Free Market Economy and Financial Crisis

...? Free Market Economy and Financial Crisis Economists believe that the deregulations of 1980s are the major root causes for the recent financial crisis which is likely to bring an end to free market economics. Reagan administration initiated liberalization, which brought about breakdowns in series due to which the government intervened and ultimately the structure destroyed the whole financial system. The Financial Crisis In 2008, the global market collapsed, The Bush administration figured out that only government intervention could save the companies whose failure could fetch destructive reactions. American Insurance Group (AIG) and Fannie Mae and Freddie Macare are those two giants which suffered from this crisis. The companies had come...
5 Pages (1250 words) Essay

Market Economy

Therefore, the market will only depend on the pricing, which affects their frequency for demand of some products. For instance, when some prices of some goods are reduced, the customers could insist on increasing the quantity in demand. This technique could be used by markets to shape their demand for products in the market, depending on the market perception of the products and pricing (Gregory & Robert 2004).  In part A, there is need to have a focus on the provided data, which would be used in plotting the demand curve. Given the equation P = 10 – 0.5 Q, there should be a stated acceptable pricing and quantity that will be used by the consumers. The pricing will have a direct effect on the quantity in demand, as they are close...
5 Pages (1250 words) Essay

Managing Mixed Economy

...? Mixed Economy History of Royal London hospital The Royal London hospital is located in Whitechapel in east London and is internationally renowned (NHS 2013). The hospital offers a wide range of specialist services which include the largest children’s hospitals and a busy pediatric accident and emergency wing. The London is also home to the capitals leading air ambulance. The Royal London hospital was founded in 1740 and initially named The London infirmary (Barts Health 2013). It was founded on by seven men who were businessmen, professional and some philanthropist’s like any other charities it was purposely to intend to provide medical services to the sick poor.in 1748 the royal London hospital name changed to The London hospital (Banks...
12 Pages (3000 words) Essay

Comparison of Free Market Economy and Mixed Economy Systems

...? Free Market Economics vs. Mixed Economy To What Extent Do You Agree With Free Market Economics Being More Effective Than a Mixed Economy? The contemporary world is different with the invention of modern communication and speedy travel. The worldwide market changes constantly and affects every individual. Rigors of several international businesses need a top-down understanding of culture and that of monetary systems. Excluding some economies such as North Korea, there are two different monetary systems, namely, the free market economy and the mixed economy. This explication espouses each system’s demerits and merits, and concludes with a statement of the better market economy of the two. A mixed economy permits parallel operation...
4 Pages (1000 words) Essay

What is a Free Market Economy

... reduced his current year demand as compared to last year. In order to bounce back from this one customer failure, the company has already contacted many other news customers that will more than compensate for the decrease in sales. Chairman Grimmond further evidence this by showing to the stockholders a letter of intent form a new major customer based in the United Kingdom for Widney Tractor Cabs starting in the year 2006. Also, Chairman Grimmond further announced that negotiations are currently being advanced with three other major new customers that will increase turnover of Widney Tractor Cabs for starting the year 2006. CONCLUSION Free market economy is the type of economy in which the resources are exchanged based...
9 Pages (2250 words) Assignment

A Comparative Study of the Origins of Ethical Thoughts

Do you know what they dug out? -- Wires! It proves that two thousand five hundred years ago, in the age of Pericles, the Greeks had telephones”. The Jew laughingly retorted: “Recently they were digging in Jerusalem. They dug out nothing. This proves that three thousand years ago when Solomon was the king of Judea, the Jews had the principle of wireless!”

ETHICS AND DIVERSE DEFENITIONS: One of the Dilemmas of the civilized human society was the fight between the soul and the flesh or rather the body and desires. The question is how to divert human energy in an intelligent, controlled way? Searching answers to this question one lands in the premise of ethics, personal as well as social. Ethics (English)...
11 Pages (2750 words) Case Study

The Necessity of Job Analysis

... obtained usually has a common basis. They usually use questionnaires which are structured. These may be questionnaires which are worker oriented structured work inventories as well as checklists. Their structure controls the response of the workers. On the other hand, customized analysis usually obtains varying information from the respondents. Interviews and face to face conferences are used. Experts are engaged in acquiring information. It is usually designed to fit to the working environment (Chris Charlie. 2007 pp 78-82) Highlight the ways in which the changing nature of work are influencing job analysis In the recent years, the rate of recruitment of skilled labour in to the market has been high, leading to a supply that exceeds...
7 Pages (1750 words) Coursework

Analysis of the Methods of 3 Research Papers about Child Abuse

Research ethics was maintained as the identity of the individuals participating was kept secret. As far as the validity of the study was concerned, the researchers attempted to use content validity in order to get an accurate response. The content validity focused on measuring off the ethnicities and gender percentages within the area and attempting to get a random sample of individuals via the phone. Their approach to random calling allowed for a significant random sample in the study. There were a few issues, however, with this type of approach. Those answering the phone sometimes were not always the desired individual, and not all of the desired people were surveyed. Different replacements did have to be used, and the attempt w...
6 Pages (1500 words) Literature review

Comparative Family Analysis

The second component of this essay will be a comparative analysis with the American family to the Arab family, generally speaking, but also clearly described by Homa Hoodfar, in her book Between Marriage and the Market. This essay will discuss the impact of globalization on different types of families in different societies and cultures. The terms ‘traditional’, ‘modern’ and ‘postmodern’ will be defined, elaborated upon and discussed on a continuum of change. Social change, in the face of globalization, will be discussed in relation to how cultures and families have grown or resisted the forces of globalization. We now turn to an exploration of the types of families in the world and follow...
6 Pages (1500 words) Coursework

Economic Analysis of India

The country’s economy is fast growing with a stable political system that encourages foreign investment although with certain restrictions. The country generally has good energy, transport and communication systems which make the cost of doing business affordably.

The Republic of India found South of Asia is by far the world’s most populous democracy and ranks seventh largest in terms of geographical area (Brown, 1994). India is also the second most highly populated country in the world. The country has a rich culture with four major religions having originally emerged from it; Sikhism, Buddhism, Hinduism, and Jainism. The Indian Republic consists of seven union territories and 28 states and ranks twelfth la...
8 Pages (2000 words) Case Study

Effect of Corporations Moving Jobs Overseas on the Economy

The issue comes into focus, whenever there are political, economic debates or talks about H1B visa limits. The economic slowdown has further led to the intensification of these debates. But, despite apprehensions from different quarters, neither the companies nor the government has said a final word on the trend. Increasing levels of competition amongst the corporate houses have been one of the key highlights of the globalization era. Be it the retail sector, the banking, the automobile, the IT-enabled services, the white goods space, etc. the companies have always been on the lookout for reaching out to more number of customers while doing everything possible to please the existing lot. Leveraging the economies of scale has prove...
8 Pages (2000 words) Coursework

Airbus A 380: SWOT and Porters Five Forces Analysis

... flight. This means that there is demand for aircraft that can carry more number of passengers at one go and the A 380 is perfectly poised to take advantage of this. Further, with the economy class passengers becoming conscious of more leg room and wider seats which the A 380 can provide, this is indeed an opportunity for this kind of aircraft. The threats to the industry are from the ongoing economic slowdown that might depress the demand for long distance travel and there has been an impact on the A 380 with some deliveries deferred and others cancelled. PORTER’S FIVE FORCES PESTLE ANALYSIS A Political, Economic, Social and Technological, Legal and Environmental factor analysis yields the facts that the political environment...
6 Pages (1500 words) Case Study

Analysis of Educational Website

... Analysis of Educational Website Introduction Since antiquity, education remained a major component of human societies; however, until few decades ago, it existed in the society in its traditional and conventional form that involved one-to-one interaction of teachers with their students in classrooms. Since few years, educators and scholars have witnessed rapid advancements in the field of information and technology that has altered almost every sector of the society in a rapid manner, and so the education sector as well. In such advancements, internet has now become one of the most popular platforms for students, teachers, businesspersons, and individuals from every sector to acquire education and information within few clicks and minutes...
7 Pages (1750 words) Article

Analysis of Articles about Climate Change

...Climate change Can we imagine an Earth where there are no green mountains, no deep blue seas and no living creatures? No. But a disaster of such magnitude and dimension is looming over Earth. Humans have identified this threat, defined it and given it a name, global warming. This dangerous proposition is based on the truth that even a 5 % increase in the surface temperature on Earth can wipe out life from this beautiful planet. And the temperature is increasing as never before. It was in 1990s that the world began to hear serious warnings on global warming and climate change. The summary for policy makers prepared as part of the first assessment report by Inter-governmental Panel on Climate Change was the first ever in depth... change Can we ...
6 Pages (1500 words) Literature review

Foreign Market Entry and Diversification

In 1990 a completely new trend was found as the domestic companies began to expand their business in a foreign market. Belgian company would be a great example as the company acquired breweries in 20 different countries. In 2004 two of the biggest breweries in the world, Interbrew and AmBev decided to merge with each other and the largest brewery in the world was created. This merger and acquisition strategy became a popular trend and it is reflected from the list of the top breweries which include SABMiller, Anheuser-Bush and InBev.

However, some of the recent trends have prompted the prediction that consumption of beer will go down in some of the European countries like France, Spain, and Germany. The threat of such a...
7 Pages (1750 words) Assignment
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic Comparative Analysis of Free Market Economy and Mixed Economy for FREE!

Contact Us