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13 Cards in this Set
- Front
- Back
Consumer sovereignty / resource allocation
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PE - unwanted goods are overproduced, wanted goods are underproduced – wastage of resources (dis)
ME - (adv) consumers determine what producers produce through purchases – no wastage on unwanted goods |
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Efficiency / degree of wastage
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PE- -less wastage on unnecessary duplication (of natural monopolies)
-no consumer sovereignty -no price signals -bottle necks in complex plans reduce efficiency -wastage on planning ME - -see above -profit encourages efficient resource use -wastage on duplication -wastage on advertising etc -no planning wastage |
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Innovation
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PE - (dis)no profit motive
plan must be adhered to, ∴unwise to take risks ME - profit incentive to innovate (lowers production costs = more profit) |
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Flexibility
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PE - (dis) production is interlinked, plans cannot be adjusted to demand
ME - (adv) market responds quickly to changes in demand |
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Economic freedom
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PE - (dis) planners decide what is produced – no individual decision possible
ME - (adv) consumers decide what to buy, producers decide what to produce can make individual decisions |
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Public goods
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PE- government provision (adv)
ME - no profit can be made from supply – not supplied (dis) |
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Stability / inflation control
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PE - (adv) fixed prices eliminate inflation
stable economic growth ME - (dis) optimismboom/inflation pessimismrecession/unemployment no steady growth |
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Unemployment
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PE - (adv) planning ensures jobs for all
overstaffing is a consequence ME - (dis) unemployment during recession |
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Equality / income distribution
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PE - adv wages are fixed
income distribution controlled ME - dis income determined by amount of resources contributed to production -many resourceshigh income -few resourceslow income |
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Externalities / environmental damage
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PE - -in theory no profit motive for external damage/cost
-no private ownership results in environmental damage ME - -external costs incur no private cost -profit not affected -private ownership means care of environment |
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Exploitation
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PE - adv no private profit motive to underpay workers
ME - dis profit – firms want to cut costs -poor safety standards -low wages -high prices in uncompetitive markets |
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Achievement of national goals
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PE - adv national focus instead of individual focus
ME - dis focus on individual goals |
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Living standards / choice and quality of goods
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PE- dis -poor quality – plan targets must be met
-wanted goods are scarce ME - dis -market responds to changes in demand for goods -competition encourages higher quality |