Command, Market & Mixed Economies??

Question

1.Examine the claim that increasing international trade leads to a widening gap in global incomes between rich and poor countries.
2.'The planet cannot survive the corrupting influence of the politician's lust for power or the capitalist's greed for profits.' Is the environment best protected by the actions of governments, corporations, or individual members of the public??
3.Market prices do not reflect the true economic costs of production. Why? What are the implications for market societies?
4.Contrast the suitability of planning and price mechanisms in organising the allocation of a nation's school students to university places.
5.What are normative and positive economic criticisms of unrestricted growth in corporate capitalism? What role of the government would you recommend in the light of these criticisms?

Help would be appreciated. Any insights as well :)

Answer 1

I'm at at college library and I see college students doing their own homework. Perhaps you need to follow that example and not expect the Internet to answer all your questions. The forum does not sit on the exam with you regardless of the wireless Internet capability of your cell phone.

Answer 2

1. The claim is most likely true. Increased international trade allows for greater specialization, which in turn leads to more rapid ecnonomic growth. Which allows the countries that have the rule of law and free enterprise to grow faster, while regulated economies are unable to take advantage of the increase in economic activity.

2. The best protection for the enviroment is to develop an ownership society. Owners don't destroy their own property. But if it belongs to everyone it belongs to no one and it is neglected.

3. Because market prices are based on the value of the item to the buyer not the cost of production. Competition will take care of the cost of production. I free market is the most efficient and fairest method for allocation of scare resources.

4. Planning an economy is a ridiculous idea."It is no exaggeration to say that if we had had to rely on conscious central planning for the growth of our industrial system. It would never have reached the degree of differentiation, complexity, and flexibility it has attained. Compared with this method of solving the economic problem by means of decentralization plus automatic co-ordination, the more obvious method of central direction is incredibly clumsy, primitive, and limited in scope. That the division of labor has reached the extent which makes modern civilization possible we owe to the fact that it did not have to be consciously created but that man tumbled on a method by which the division of labor could be extended far beyond the limits within which it could have been planned. Any further growth of its complexity, therefore, far from making central direction more necessary, makes it more important than ever that we should use a technique which does not depend on conscious control." (The Road to Serfdom)

That would be a free market system. The Soviet Union is a good example of how a planned economy fails.

5. The excesses of the free enterprize system are extra food, extra clothing, and extra wealth. The proper role of government is the protection of individual rights. Not choosing winners and loser.

These questions must have been generated at a government school.