What each system has to offer
Recall Recall that each system focuses on certain economic goals more than others What were these goals? Economic freedom, growth, stability, equity, security, efficiency What are some of the other characteristics of these systems?
Private ownership (property) Property Rights – the right to own land/ideas/resources Command – gov’t tends to regulate what is best for certain types of property Pure Market – completely privately owned Mixed Market – Privately owned AND protected by the gov’t, but keeping in mind that it could still be used for the common welfare of that nation – meaning if it’s better for everyone
Profit/Wealth Profit Motive – most producers (businesses/firms) are driven by profit, which often leads to competition and FAIR prices Command – Gov’t controls prices, which means they control profit, which means competition is not promoted, which can mean unfair prices and not strive to be innovative Pure Market – no prices controls or regulations leads to competition, but lacks any regulations to protect consumers or innovation : ( People can steal your ideas Mixed Market – Promotes competition and innovation , gov’t only interferes to regulate and protect consumers or producers
Consumer Sovereignty Consumer Sovereignty – consumer choice Self-Interest = seeking what is best for me Command – since gov’t controls prices, they’re aren’t a lot of choices or desire to shop around – prices will be the same no matter where they go. Lack of competition leads to fewer choices. Pure Market – competition allows consumers to shop around for best products/prices, but lack of gov’t can lead to VERY unstable prices – unsafe products Mixed Market – consumers have many choices, but gov’t can regulate products and prices in certain circumstances
Government Regulation Command – Gov’t controls factors of production, prices, competition, distribution of wealth Pure Market – No government controls on prices, factors of production, distribution of wealth, competition Mixed Market – New PowerPoint