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Microeconomics 2nd Edition by Douglas Bernheim
Edition 2ISBN: 978-0071287616Microeconomics 2nd Edition by Douglas Bernheim
Edition 2ISBN: 978-0071287616 Exercise 1
Name three examples of each of the following (other than those given in the text):
a. Goods that are provided centrally, by the government.
b. Goods that are provided by firms operating in decentralized markets.
c. Goods that are provided both centrally by the government and by firms operating in decentralized markets.
d. Goods that are provided through some decentralized procedure other than markets.
a. Goods that are provided centrally, by the government.
b. Goods that are provided by firms operating in decentralized markets.
c. Goods that are provided both centrally by the government and by firms operating in decentralized markets.
d. Goods that are provided through some decentralized procedure other than markets.
Explanation
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a)A centrally planned economy is an economy where all the economic decisions of what to produce, how to produce and for whom to produce are taken by the government. Goods that are provided in such an economy are mostly intended to serve all the members of a community. Some of the goods are water supply, electricity, and police.
b)Decentralized economy refers to an economy where production and distribution decisions are taken by economic agents.i.e. buyers and sellers without government intervention. For example, grocery stores, shopping complexes and dry cleaning.
c)Goods that are provided by both government and private firms operating in a decentralized market are schools, hospitals, and mail delivery.
d)Goods that are provided from a decentralized market other than free market means where the degree of decentralization is low; private firms produce along with some regulation by government. Such goods are vehicles, roads, and bridges.
b)Decentralized economy refers to an economy where production and distribution decisions are taken by economic agents.i.e. buyers and sellers without government intervention. For example, grocery stores, shopping complexes and dry cleaning.
c)Goods that are provided by both government and private firms operating in a decentralized market are schools, hospitals, and mail delivery.
d)Goods that are provided from a decentralized market other than free market means where the degree of decentralization is low; private firms produce along with some regulation by government. Such goods are vehicles, roads, and bridges.
Microeconomics 2nd Edition by Douglas Bernheim
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