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Economic Systems
In the foregoing analysis we have explained how the free market economic system which is historically called capitalism works and what are its merits and drawbacks. We have also studied how at present in the market economies government plays a role in improving the functioning of market economic system. How an important question is if there is any alternative economic system known as authoritarian socialist system or command economy was adopted in erstwhile soviet Russia, china east European countries such as Poland Czechoslovakia. In this authoritarian socialist system or command economy basic economic problem of what how and for whom to profuse etc are resolved through a combination of state ownership of productive enterprises and centralize planning. It is government or any central authority set up by it that decides output targets for each public enter price allocates resources to the mind fixes prices of various goods and series and income (wages, salaries) of various types of workers.

In a centrally planned socialist economy there exists a central planning authority which organizes and regulates the various economic activates. Thus it is the central planning authority which determines what the various productions unto is shllproduce what the various individual shall obtain for consumption and as a result what shall be left for investment further it decides whist type of investment shall be made.

It should be realized that the organization of the various economic activates by one planning authority is full of administrative and economic difficulties. The authority is faced with the political and administrative problems of getting their decision implemented. In other words there are problems of putting the various decisions into effect. Moreover the planning authority is faced with an overall economic problem namely how to use the limited productive resources for achieving the best possible results. The particulars purpose for which resources ar to be used have to be decided. In other words allocation of resources as between various kinds of consumer goods, and as between consumer goods and capital goods and as between civilian goods and war goods has to be decided. In other words allocation of resources as between various kings of consumer goods, and as between consumer goods and capital goods and as between civilian goods and war goods,, has t be decide taking of all these decisions is indeed a very difficult takes besides decisions have to take about the particular techniques with which various products ar to be proceed and about distributing goods among the people.

It may be note that planning of actual production of various products is greatly difficult due to the fact that technical relations between different kinds of products are very much complicated. For example to build ships it apparently seems that only still and other materials which makeup ships are required? But little ore thinking will reveal that arrangements for the complicated process of production of still and other materials have to be mad3 before still and other materials become available of se in ship building. Moreover various types of machinery would have to be made for converting iron or into still as well as converting still into ships. Further the arrangements of coal electricity and transport have to be made if the production of steel and ships is to become possible. Thus technical relations between different kinds f output are so complicated that for carrying out the decision to produce more of one kind of product adjustments on servile other lines have to be made.

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Economies In Consumption Economies In Production Welfare Economics Theorem Market Failure Pareto Criterion Welfare Economics Value Welfare Economics Asymmetric Information Present Values Insurance Market Intertemporal Choice Intertemporal Analysis Market Signalling Perpetuity Stocks Versus Flows Lemons Market Principal Agent Problem Moral Hazard Oligopoly Characteristics Oligopoly Price Determination Firms Interdependence Price Discrimination Oligopoly Oligopoly Price Output Price Discrimination Degrees Price Discrimination Conditions Price Discrimination Possibility Price Discrimination Timing Profit Maximization Price Theory Profit Assumption Profits Theory Economic Rent Rise Selling Costs Effects Selling Costs Role Economic Systems Capital Formation Comparative Statics Competitive Markets Economic Dynamics Economic Statics Economic Growth Microeconomics Importance Inductive Method Production Inefficiency Micro-Macro Interdependence Microeconomics Scope Scientific Theory Economic Laws Nature Production Possibility Curve Economic Hypothesis Economics Scarcity Inductive Methods Steps Consumer Surplus Applications Cardinal Utility Demand Changes Complements And Substitutes Consumer Surplus Concept Consumers Equilibrium Consumer Surplus Demand Determinants Demand Curve Demand Schedule Elasticity Tax Demand Extension Income Elasticity Indifference Curve Indifference Curve Approach Indifference Curves Demand Theory Substitution Marginal Rate Marginal Utility Rate Market Demand Curve Market Demand Function Marshalls Consumer Surplus Consumer Surplus Measurement Price Elasticity Measurement Preference Hypothesis Price Consumption Curve Price Elasticity Importance Price Elasticity Determinants Demand Price Elasticity Revealed Preference Theory Substitution Elasticity Demand Law Interest Classical Theory Productivity Concepts Rent Concepts Demand Factor Determinants Fishers Interest Theory Functional-Personal Distribution Interest Keynes Interest Theory Land, Rent, Cost Distribution Theory Loanable Funds Marginal Distribution Profits Dynamic Theory Quasi Rent Rent Concepts Rent Ricardian Theory Risk And Uncertainty Factors Supply Wage Determination Average Fixed Cost Average Total Cost Capital Douglas Production Function Compensation Principle Marginal Returns Capital Growth Scale Economies Technical Substitution Entrepreneur External Economies Supply Factors Production Factors Isoquants Properties Human Capital Profit Innovation Theory Interest Theories Isoquants Labour Land Production And Cost Linear Production Function Long Run Equilibrium Marginal Cost Marginal Substitution Monopoly Characteristics Monopoly Price Monopoly Capacity Monopsonistic Discrimination Opportunity Cost Production Function Returns To Scale Capital Role Supply Rent Concepts Fixed Variable Costs External Economies Types Advertising Effects Average Revenue Collusive Oligopoly Competitive Strategy Contestable Markets Dominant Strategy General Equilibrium Monopolistic Equilibrium Monopoly Features Industry Equilibrium Firm And Pricing Supply Curve Marginal Revenue Market Market Forms Market Cartels Monopoly Measurement Monopolistic Competition Monopoly Monopoly Sources Newmann Game Theory Partial Equilibrium Price Determination Price Leadership Thumbs Price Rule Product Differentiation Rent Control Sales Maximization Selling Costs Static Dynamic Stability Time Element Price