1.1.1 Next best alternative foregone when a choice is made
1.1.2 Econoic Systems
220.127.116.11 Market System
Pure market systems are free of government intervention. Price mechanism is how the three questions are answered which makes the consumer soveriegn. Price acts as a signal, rationing device and incentive and can transfer preference. Firms respond to increased demands to achieve profits. The invisible hand. Assumption is consumers aim to maximise utility
18.104.22.168 Centrally Planned
100% government influence and the 3 questions are attempted to be answered by them. Failed experiments in Soviet Union and China - Communists. No consumer or producer soveriegnity. Government decides what, how and for whom the produce goes to. Profit is not an objective. Factories get production targets.
From each according to ability, to each according to need.
No profit so not exploitation
Government does not/cannot know what everyone needs
Laziness and low productivity as no profit incentive
22.214.171.124 Mixed Economy
Blend of market and planned economies. Quantity varies massively. Most ecnonomies are mixed. Most efficient as benefits of both government intervention and market forces.
1.2 Not enough resources to satisfy human wants and needs