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Essay / Research Paper Abstract
This 5-page paper provides a theoretical discussion about resource allocations in free-market economies. Bibliography lists 5 sources.
Page Count:
5 pages (~225 words per page)
File: AS43_MTresoallo.doc
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Unformatted sample text from the term paper:
economics, in its most basic definition, focuses on "trade-offs involved when choosing between alternate sets of decisions," according to economist Lionel Robbins in the 1930s (Buchanan and Thirlby, 1981). In
other words, economists study what trade-offs individuals and firms make (microeconomics) or nations make (macroeconomics) when it comes to scarce resources. These decisions
differ in a market economy versus, say, a socialist economy. A market economy is one in which there is little government intervention, and resource allocation, supply, demand and pricing are
determined by the markets and individuals, rather than by governments or other outside forces. A socialist economy, in the meantime, is when the government determines resource allocation. In a market
economy, market forces are allowed to drive the majority of market activities, from pricing to inventory. Which is the "better" economy when it
comes to resource allocation? A lot of it depends on whether the economist in question is based in a country in which centralized government controls resources through state-owned enterprises, or
in a country in which the government, more or less, encourages "private" enterprise. In the United States, for example, neoconservatives have beat the drum for free markets, pointing out that
the "markets" should decide allocation of resources. Market economic theory points out that free markets end up maximizing the economic well-being of an entire society (Cote, 2009).
There are those, however, who disdain the idea of markets having control over resource allocation. Ding (2009) and others, for example, point to the so-called
"China miracle," a blend of market economies and centralized control that have created a wealthy country. Ding, for one, points out that a market economy isnt really a "free" economy;
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