Question

please respond in word document or CLEAR WRITING.

Economic systems differ in who owns and who controls these various resources or "factors of production". An economic system can best be described as a method that a country uses to allocate it resources amongst its citizens. In today's global economy one can find different types of economic systems which can differ from country to country. The four market structures operating in the Canadian economy influences the goods and services that we consume as well as price and service level.

Objective

In this exercise you are asked to demonstrate your understanding of the three main economic systems and explain the major distinguishing features between them. You are asked to explain how supply and demand shocks impact on price levels and market equilibrium for each economic system or one system? You are to identify a product or service sold in each of the four major market structures operating in the Canadian economy.

1. Identify which country best demonstrates the following economic system: command economy, market economies, and mixed economies and explain why you believe that country exhibits that economic system.
2. Recently, a number of countries have shifted from a planned economy to a market economy. Name two of these countries and state what the impact on their economy was.
3. Find an example of a product in the market place where a surplus led to decreased prices. Find an example where a shortage of a product led to increased prices. What eventually happened in each case? Why?
4. Identify a product or service sold by in each of the four main market structures in the Canadian economy. Explain why this product is sold by that market structure.  

Answer 1

Command economy best example is North Korea due to high autocracy and centralised decisions making.

Market economies best example is India which has democratised laws and decentralised decisions making believing in Capitalism.

Mixed economy best example is China which transformed fron Command to mixed economy due to amalgamation of communism and capitalism both.

Poland and Hungary are best example of countries which have moved from planned to market economy and thus has now seen various hiccups and administrative challenges as well as execution of economic reforms and hence have witnessed negative growth in GDP.

Products like Steel which has suprassed average global production has led to heavy dumping by China into Europe and US and Hence decreased prices.

Similarly, after OPEC cut its crude oil production, the prices rose from 60 dollar to 71 dollars per barrel in 2018.

Market structure example in Canada

Oligopolistic market - Cable services because it is operated by 4-5 major players of equal sizes.

Monopolistic market- Space research because it is only controlled by CSA

Perfect competition - Banking loans which are provided by state and private banks at almost similar rates and almost 10 and above banks

Monopolistic competition - Electric cars are sold by Hyundai, Kai, ford, Nissan, Chevrolet however are differentiated in quality and are not perfectly substitutes.