Question

Write an essay of 200 words comparing the ways in which command economies and market economies affect a worker's life.

Answer 1

Characteristically, Command Economies are bad when it comes to a person interested in making a profit; this is because they typically center on economic equality and do not have economic efficiency. Speaking in general, in a command economy, the allocation of resources is done by a Central Planning Committee, and this system usually leads to quite a number of shortages and/or surpluses in products since the demand/supply can be impulsive. On the other hand, Market Economies are centered on profit-making and Economic Efficiency.

Essentially, how well resources are distributed among the public will determine how well people will be rewarded. Let’s take for instance, a parking lot like downtown; characteristically, a market economy will likely focus on how to place as many cars as possible in the lot and how to use the space to its full capacity, while a Command will most likely try to apportion the space so that (just for example) 3 small, 3 medium and 3 large vehicles are parked (economic equality).

Finally, with a market economy, there is likely to to be less shortages and less surpluses, since it works with the Law of Supply and Demand in which an equilibrium price will be automatically established through buying and selling.