Week 1 Homework Essay

Submitted By kybank5138
Words: 612
Pages: 3

In terms of which economic system would be best suited for handling a crisis of epic proportions, a mixed economy would be most efficient. When it comes to any kind of disaster, whether it is natural or not, people often look to their government for aid. No matter the size, a natural disaster can affect the lives of many people, from just a few, to hundreds and thousands. Yet, natural disasters often make it difficult for a government to respond quickly and effectively (Natural Disasters). When it comes to a solution following a natural disaster, it is most often that the government decides on a plan of action for aid of its citizens.
A mixed economy is made up of a variety of government and private control, which reflects both socialism and capitalism (Economic Systems). In this kind of economy during a disaster, “consumers receive protection from the government in the form of financial assistance, but businesses are allowed, and in fact encouraged, to make a profit no matter the extent of the disaster” (Natural Disasters). So during a disaster, this economy makes sure that those affected receive the aid that they need as soon as possible, but also ensures that business are able to make profit providing goods and services that are needed. So, a mixed economy would be most beneficial because it supports the most effective way to get aid to those in need during a disaster.
A socialist system, or command economy, might be the best in responding to the needs of people struck by an emergency situation like the earthquake that occurred in Haiti in January 2010. A socialist system can possibly be better able to move more quickly in terms of a solution, during a natural disaster. The government is in complete control in this kind of system, and would be able to command aid to the affected area in a more immediate manner. “Command economies have certain advantages over free market economies, especially in terms of the coordination of scarce resources at times of crisis, such as a war or following a natural disaster” (Economic Systems). So in a command economy, the government would be able to quickly and efficiently send recovery to the disaster area without having to waste time contacting outside sources to do the work instead.
The rule of supply and demand states that changes in either supply, demand, or both will impact market price (Law of Supply