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macrohw - decisions are taken by individuals and firms...

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MACROECONOMICS ECO 201_1A LUZ MIREYA GONZALEZ 1. Are “doing good for other” and “doing well for oneself “, conflicting ideas according to Adams Smith? No, according to Mr. Adams smith you can do well in your own benefit and the same time help others to make best use of that situation to benefit them too. One of his clear example; is when big companies take full advantages of their profits and sources supplies maximize their incomes at the same time is helping maximize society’s output and income. 2. In market economics, firms rarely worry about the availability of inputs to produce their products, where areas in commands economics input availability was a constant concern. Why the difference? The most remarkable difference is that in a market economy, all economic
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Unformatted text preview: decisions are taken by individuals and firms, which is assumed to act in their own self-interest, in contrast, command economy is a system in which the government controls the factors of production and makes all decisions about their use and about the distribution of income. 3. Why do you think sole proprietorship and partnerships typically incorporate (become corporations) when they experience rapid and sizable increases in their production, sales and profits? • I think due to success and rapid increase of their production capacity they need to obtain more financial sources to be able to performing relative to its competitors and to satisfy their customer demands....
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