- How is the basic economic problem being handled by the use of coupons? Why might this be less successful than money?
- Does the article demonstrate the failing of the command or free market based solutions to the basic economic problem?
In addition to the above below is a link to Mark Johnston’s econfix blog. The post highlights the possible negative externalities that have occurred in Berlin with the change in economic systems.
Advantages and Disadvantages of a free-market economy
- Self-Adjustment (equilibrium):
- Human Psychological Aspect:
Advantages and disadvantages of a Command economy:
- Planned & Greater Predictability:
- Elimination of Opportunity Cost:
- Valuation of Services (education, health, etc.):
- Misallocation of Certain Resources:
- Lacking Innovation (no choice or variety):