EconomicSystemsEconEssay 1

Submitted By cutenazaneen
Words: 509
Pages: 3

Nazaneen Iravani
Mr. Boyajidian
Economic Systems The Command Economy and Market Economy are both apart of the fundamental, yet complex, economic system, that is used to apportion resources across the economy. Both are incorporated as systems in allocating resources because resources are scarce and limited throughout the nation; being insufficient in satisfying the unlimited needs and wants of individuals. Therefore, such systems were created differently, and with different strengths and weaknesses, for the same altering effect in boosting the economy’s potential and growth. One of the strengths of a Command Economy is the acting authority figure, which is the government. The government provides essential goods to the economic system, but in return, controls the factors of production and makes all the decisions in regards to the growing consumer rate in the supply and demand of outputs. A Command Economy refers to the economic system in which government state owns and controls all the resources within its jurisdiction; meaning that individual’s aren’t allowed to dictate authority over their use of resources. Thus, granting the government all the power in determining what should be produced, what proportions should be dedicated to each economic sector, and how the resources should be distributed. Which further uproots as disadvantages in the system that restrict consumer’s choices and waste natural resources. In a Market Economy, individuals are allowed to own and control whatever resources are available to them. Thus, creating an advantage in such an economic system that allows consumers the freedom of choice and results in high degrees of consumer satisfaction. In addition to the minimal government interference over economic proceedings, individuals compete against each other for economical gain; providing plenty of new ideas and innovations. However, because of the systems leading disadvantage, being self-interest, sometimes markets don't always work as they should. Since firms and individuals have the power to determine what goods are produced, what profits to acquire, and what necessities to produce, there is a lot of room for a mistake