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Recommended: Role of the Government in a Market Economy

“The economic problem is a theory that scarcity exists in the sense that only finite and insufficient resources are available to satisfy the needs and desires of all human beings.” (Business dictionary, 2014) Market and planned economy are both used in the world today. Many arguments have been stated on which is superior. They both differ in substantial ways in that market economies are a system that the economic decisions and the pricing of goods and services are decided solely by interactions of a countries citizens and businesses, so there is little government interaction. This is the opposite of a centrally planned economy; a centrally planned economy is an economic system in which the government makes all economic decisions rather then interaction by consumers and businesses. The production of goods and services is initiated by state-owned businesses. The market economy is the best way to solve the economic problem, and provide a quality of life. Because it has a more widespread use around the world, people have a freedom of choice and there is little government interaction with the economy. Causing producers and consumers to produce and buy anything, they would like and that the market economy is simply superior for producers and consumers because it gives freedom.

The market economy is used in most nations in the western world, including the United States, Canada and Australia. It is also common in other places such as Asia and Africa. There have been countries that have moved from a planned economy to a market. This process is called a Transitional/Transition economy. Examples of these would be: China, Laos, Russia and Vietnam.
Market economies are used in nearly all areas of the world because; it is efficient and gives ...

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...uld be able to produce it, EG Apple supplies the consumers with iPhones and the consumers Wants is the iPhone. Opportunity costs arises when there are two wants, for example a company wanted to make two products, being apparel or mobiles, the company would have to overlook the opportunity cost, being that if the company picks apparel, less mobiles will be produces, causing less profit from it.

Works Cited

http://www.britannica.com/EBchecked/topic/127708/command-economy http://www.auburn.edu/~johnspm/gloss/market_economy http://en.wikipedia.org/wiki/Economic_problem http://www.investopedia.com/terms/c/centrally-planned-economy.asp http://www.investopedia.com/terms/m/marketeconomy.asp http://answers.yahoo.com/question/index?qid=20110618184500AAhYeuU http://www.dineshbakshi.com/as-a-level-economics/basic-economic-ideas/117-revision-notes/1349-planned-economies

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