Free market economy-Adv
1.	consumer sovereignty+satisfaction
2compet.leads to low prices
3producers max profit
4comp.leads to efficiency
5innovation
6higher living standard
7economies of scale
8choise:goods,jobs
9max utility
10production adapts quickly 

 Dis
1leads to a trade cycle
2ass.2&3do not hold
3leads to monopoly
4uneven distribution of income
5life becomes more expensive
6poor Q goods
7drugs no restriction
8consumers are often ignorant of the true costs/benefits
9wastage resources on substitutes
10wastage on advertising
11profitable goods for rich produced
12market failure-no public(defence)&merit goods(education,health)
13instability+short-termism
14unstable growth-discourages investing
15bottleneck in Supply
16no social security/welfare
17Large externalities as price=PMC=PMB

Centrally planned Adv-
1.	social/public/merit goods provided
2.	no inequality,trade cycle,instability,wastage on close substitutes,bottleneck in S,market failure,inflation
3.	long term planning
4.	continual full employment
5.	planned controlled growth-encourages investing

 Dis
1.	census may be wrong or out of date
2.	wastage on resources on bureaucrats
3.	few goods
4.	no choice of jobs
5.	no incentive to work hard
6.	no innovations

 Mixed components:
1.	a free enterprise sector
2.	Govn regulation of economy through budget
3.	public ownership of some industries
4.	welfare services provided by state or by state administered schemes

 Prospect
1.	economic
central problem- failure of Keynesian management
Now using Microeconomic programs
2.	political
Policy must work within political framework,(little choice for consumers)
Gov.could only roughly estimate the wants of consumers
Gov.is re-elected after every 5 years,most policies will not work&govn will aim only on re-election
3.	technological
Microprocessors are having major effect on lives
Some(Galibrath)believe technology has created new decision process-progs
Firms have grown too big&are hard to monitor

 Provision of goods&services:
State can either finance its services indirectly by taxes or directly(e.g.railways)by public corporations.Some(defence)are provided directly from central govn

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{info author|Keith Siilats}, {DATE|24/05/96}, Subject: {info subject|Economics, revision}, Words: {info numwords|500}

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