how the different economic systems solve three major micro economic problems?

Question

i want to have the major features of an economic system and analyse differing views of the role of the state and their implications

Answer 1

Under Communism (also called "central planning" or "socialism"), the state decides how much of everything should be produced and tells producers what to do. If there's a shortage of something, the factory planners at the place experiencing the shortage will pass word up the heirarchy and the senior planners may accept it and tell the producers of what's in short supply to make more of it. It's an intrinsically bureaucratic system, slow to adjust to changes in taste, preference, or external circumstances. It doesn't work, that's why the USSR collapsed under the weight of its own internal contradictions.

Under capitalism, the market is giving de-facto signals to business in small increments all the time. Micro economic problems do not arise except for time lags between market signals and producer responses. (The first effect of a rise in demand for air-conditioners during a heatwave, for example, is to lengthen delivery times for airconditioners.)

In the socialistic parts of a liberal democracy, if the demand for, say, airport runway space rises, the airport does not simply buy the land and build the runway. It first has to submit a planning application, politicians turn down the plans because of local objections, then national politicians set up a planning inquiry, then all the objections and their lawyers are heard, then the Inquiry inspector writes a report about it saying why there should not be a runway, then the government overrules the inspector and says the nation needs the runway and go ahead anyway..... all this takes five to seven years and nobody wins except for those who collect fees or wages along the way like lawyers and Inquiry secretaries.

Answer 2

There are only three major microeconomics problems? ;-)

That's an oversimplification, but:
* Laissez-Faire will approach through a market system
* Central planning will approach the problems as "market imperfections" and require some form of a fix.
* Socialism will dictate entirely the allocation of quantities as well as teh corresponding price level.

Thus the 'solutions' create their own problems.

I can't be more specific - this is really a very general question.