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Unformatted text preview: he command economy discourages individualistic profit motives
and consumeristic needs. Under such a planned system, rewards,
wages, and perks are disbursed based on the social value of the
service performed. Certain sectors of the command economy get
preferential allocation at the expense of others, which may lead to
shortages in some essential goods. Absence of profit motives in a
command economy precludes any need for competitiveness. This
acts as a disincentive in individual contribution to collective efforts.
Short-term advantages of a command economy contribute to its
long-term failure. In the 20th century, the former Soviet Union was
an example of a command economy. China and India used to also
have a command economy. Today, countries using command
economy are rare, remaining examples of countries with a command
economy include Cuba and North Korea.
economy Mixed Economy
Mixed A "mixed" economy is a mix between
Command and Market economy. It is a
hodgepodge of freedoms and
regulations, constantly changing because
of the lack of principles involved. A
mixed-economy is a sign of intellectual
chaos. It is the attempt to gain the
advantages of freedom without
government having to give up its power.
government Wants (Ends)
In economics, a want is something that is desired. It is
said that people have unlimited wants, but limited
resources. Thus, people cannot have everything they
want and must look for the best alternatives which they
can afford. Wants are often distinguished from needs. A
need is something that is necessary for survival (such as
food and shelter), whereas a want is simply something
that a person would like to have. Some economists have
rejected this distinction and maintain that all of these are
simply wants, with varying levels of importance. By this
viewpoint, wants and needs can be understood as
examples of the overall concept of demand.
Utility is the word used to describe the pleasure or
satisfaction or benefit derived by a person from
consuming Scarcity of Resources
Scarcity of resources refers to the limitations in fulfilling
each and every want of a person because of deficiency
of resources needed to fulfill a want.
“The basic economic problem which arises from
people having unlimited
wants while there are and always will be limited
resources. Because of
scarcity, various economic decisions must be made
to allocate resources
If there were no limitation or scarcity of resources then
no economic problem would have arisen.
no Microeconomics (Price Theory)
Pros. Microeconomics helps in the formulation of
economic policies calculated to promote
efficiency in production and welfare of the
1. It tells us how the prices and the factors of
production are to be determined.
2. Helps in making an individual economy
3. Micro-economy reveals how...
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