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Mixed Economic System - Coggle Diagram
Mixed Economic System
Market failure
1) Public goods will not be provided
2) Too few
merit goods
will be supplied
are good, many external benefits
health care
linkin
3)
Demerit goods
will be over supplied
are bad, too many external cost
drugs, alcohol, tabaco, petrol
linkin
4) Some firms may exploid consumers and employees
5) Factor immobility obstruct the ability of firms to allocate resources efficiently
lack of training
6) Good and services with significant
external cost
will be over provided
7) Good and services with significant
extrnal benefit
may be over provided
Measures the goverment has
1) Direct provison on goods and servises
2) Price controls
setting maximun and minimun prices
3) Indirect taxes
texes on good and servises
4) Subsidies
lower the factors of production, lowering the price or increasing supply
good in the short run
between
public
and
private
sector
Planned economic system
Free market system