Chapter 2 Assignment

Chapter 2 Assignment - Chapter 2 Assignment 1 Contrast how...

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Chapter 2 Assignment 1. Contrast how a market system and a command economy try to cope with economic scarcity. Pure capitalism aids the market to cope with economic scarcity. The system allows for the private ownership of capital, communicates through prices, and coordinates economic activity through markets. Goods and services are produced and resources are supplied by whoever is willing and able to do so. The result is competition among independently acting buyers and sellers of each produce and resource. Under a command economy, the government owns most of the business firms, which produce according to government directives. The central planning board determines production goals for each enterprise and specifies the amount of resources to be allocated to each enterprise so that it can reach its production goals. The division of output between capital and consumer goods is centrally decided, and capital goods are allocated among industries on the basis of the central planning board’s long term priorities. 2.
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This note was uploaded on 10/13/2008 for the course ECN 201 taught by Professor Mapp during the Spring '08 term at A.T. Still University.

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Chapter 2 Assignment - Chapter 2 Assignment 1 Contrast how...

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