Market Economy

 [Source: flickr.com Image by Concrete Forms Some rights reserved]

All economies need to answer the three basic questions which result from the fact of scarcity:

  • What to produce
  • How to produce
  • For whom to produce

For a market economy, we need to research the following:

a) How it works – how does it answer the three basic questions above?

b) Advantages of this economic system

c) Disadvantages of this economic system

d) Examples covering the three above points

Note: It is important to be able to compare this economic system to that of command (or planned) economies (– see previous post).

Some useful ’starting point’ web sites follow:

Wikipedia on Market Economies

Economywatch.com on Market Economies (possibly sourced from elsewhere)

The Free Dictionary on Market Economy

‘Market Economy Totally Explained’

Is a free market "free" if it’s regulated? (How Stuff Works)

A video on Free Market Economies can be viewed here (source: videos.howstuffworks.com)

From the same site, a video comparing market economies to command economies.