Question

Compare how resources are allocated in market and mixed economic system

Answer 1

In the market economy, resources are allocated by the price mechanism which is the market forces of demand and supply. This type of economy is based on the preferences of the consumers.

In the mixed economy system, most of the resources are allocated by the price mechanism although here, some are also allocated by the government considering that it is a mixture of both the market economy and the planned economy that allows the best of both economies to be in one economy.