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Transition from Planned Economy to Market Economy

Question

Discuss whether the transition from a planned economy to a market
economy will always be better for consumers.

Category:

Economic Systems

Cambridge International AS & A Level February/March 2022

Preview Answer

Outline for the Economics Essay:

I. Introduction
A. Explanation of the essay question
B. Definition of key terms: planned economy, market economy, consumer sovereignty

II. Advantages and Disadvantages of a Planned Economy for Consumers
A. Analysis of potentially positive consequences
1. Central planning can prioritize essential goods and services
2. Reduced income inequality and poverty
3. Guaranteed access to basic necessities

III. Advantages and Disadvantages of a Market Economy for Consumers
A. Analysis of potentially negative consequences
1. Imperfect information leading to underproduction of merit goods
2. Overproduction of demerit goods due to profit motives
3. Income inequality and unequal access to goods and services

IV. Evaluation of whether the transition to a market economy will always be better for consumers
A. Consideration of "will always" element
B. Weighing the advantages and disadvantages of both systems
C. Examination of the potential uncertainties and outcomes of the transition

V. Conclusion
A. Summary of the main points discussed
B. Balanced evaluation of the benefits and drawbacks for consumers in both a planned and market economy
C. Final conclusion based on the analysis presented

Now let's proceed to write the economics essay.

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