“Resource are the goods and services available to individuals and businesses used to produce goods and...

“Resource are the goods and services available to individuals and businesses used to produce goods and services.” List and discuss any four types of resource allocation method.

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Expert Solution

The resources are allocated based on the type of economic system prevails in the economy and according to the scarce resources are allocated among businesses and individuals. The four types of economies are as follows; traditional, market, command and mixed economy.

Traditional economy derives its main production from the traditional means and basic factors of production like land are the main source of livelihood.

Command economy is an economy under a centralized authority which is responsible to take decisions for the economy as a whole regarding distribution and allocation of resources. It has its own advantages and disadvantages.

The market economy is a free market system where market players which are households and firms determine the allocation of goods and services according to their self-interests. It believes in no government intervention which can be responsible for over-exploitation of resources.

A mixed economy is a combination of any two economic systems basically a balance between command and a free market system where involves regulation of private businesses by the government in certain areas like public utilities.

Rahul Sunny answered 1 year ago

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