The mixed market economy.

Have a little read: ... This essay analyses the Mixed Market Economy and determines how effective it is in allocating resources. In order to discuss this, the essay includes the features of the Command Economy with the advantages and disadvantages. In contrast the Market Economy is discussed with its advantages and disadvantages emphasizing on the Price Mechanism. Then the Mixed Market Economy is analysed referring to its advantages and disadvantages. Fourthly, the Allocative Efficiency of resources in the Mixed Market Economy is discussed. Followed by the paragraph about Market Failure and how government intervention can make the Mixed Market Economy more efficient. Lastly, a real world example of a mixed market economy is given to support the argument. The Command Economy is also called a centrally planned economy because the state decides what to produce, how to produce and for whom to produce. Therefore the state owns the factor of production. The aim of the Command Economy is greater equality of income and wealth and everybody has identical standard of living. The advantages of the Command Economy are that unemployment doesn't exist because workers are allocated to jobs by the state. Also there is more economic certainty in a command economy because for example the income remains the same after an industrial accident; this contributes to the welfare of the country. The disadvantages of the Command Economy are that the consumers have little choice about what they buy. And as monetary reward in the Command Economy stays the same, the workers have little incentive to work hard and well. The Command Economy is less efficient at allocating resources than the market economy, since the allocation is planned and doesn't respond to the market and the needs of the consumer. There it is difficult to react flexible and quickly to changes in economic conditions and this causes the failure of the Command Economy. One real world example in China is "The resulting inefficiency is illustrated by the washing machine industry. Massive over-capacity has occurred because the industry has not responded to the needs of the consumers. Last year 30 million machines were produced, yet only 11 million were sold domestically and 500,000 abroad"1 In contrast to the Command Economy, the factors of production in the Market Economy are owned by individuals or firms and the Market Economy's features are self-interest, competition, and profit making. The three economic questions what to produce, how to produce and for whom to produce are