Economic Decisions Defined
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Essentially what do you think are the changing aspects of economics ( customer technology and competition) of the following industries?
a. Telecommunication
b. retail merchandising
c. higher education
d. airline.
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Solution Summary
The solution defines economic decisions.
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The main concern that underlies all of these is really "who decides?" The two very general ways to answer this are the market or the state (some public entity).
The issue is production: what should be produced, how and who are the people who will receive or benefit from this production. These are the most fundamental questions that can be dealt with in economic science and go far beyond economics as such.
The Market: think of this as "economic democracy." The market is really the public. They make their demands felt through their demand; what they want to buy in the stores. This is reflected in prices as a contract?so to speak?between the buyers and sellers of anything.
The market requires private property, the elimination of the state as a major player in economic decisions and finally, a social system based almost entirely on the enforcement of contracts. Law is about the conditions under which a contract can be entered into and carried out. Otherwise, the market takes care of anything else.
We are dealing with purposeful choice. Usually, the textbooks stress the idea of "scarce resources" but as of 2012, it is tough to see how resources are scarce, given the massive amount of productive capacity worldwide.
The questions you pose are based around the nature of choice. Who makes it and for whose benefit? The market is based on some kind of democracy, while the command economics is based on state elites that are experts in what any society needs.
The idea of the command economy is that all healthy societies need certain things that the average person may not want, care about or take for granted.
Command Economies:
The alternative to the market is the control over production by the state. The arguments for this is that smaller or more vulnerable states or ...
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