The world is run with economic systems. Two of these economic systems are the market economy and thecommand economy. These economic systems both greatly differ and are similar in there ways of controling thefactors of production, ownership, and their incentives for efficient production.An area of the world that has a command economy is India. The government controls and makesdecisions with the factors of production. The factors of production are the resources used to produce goods andservices, such as lonad, labor and capital. Within these socialist areas, there is no presence of motivation, a veryimportant factor in an economy. This is because no matter what they do for their economy, everyboyd will recievethe same pay. For example, a doctor would get paid the same amount as a dishwasher. This creates unmotivationbecause there is nowhere to progress to. People don’t want to work hard for the same pay as someone whodoesn’t. Also, since the government controls the factors of production, and not the individual consumersthemselves, it is impossible for the few in power to know the many needs, and conditions of resource availability,within the whole economy. Therefore, many things of importance are not recognized, or over looked and theeconomy and people suffer from the loss. It is present in these areas of socialism that many of the people sufferfrom poverty because of this economic system.Hong Kong used to be a command economy. Hong Kong was very poor. This poor area quickly changedover the years into a very prosporous place. This is due to it’s change to the market economy. Hong Kong is alsothe freest of economies. The United states of america also has a market economy. In a market economy, or freeenterprise economy, the individuals own the factors of productin, and make the decisions with them. This isunlike the command econly becaues their government controls the factors of production. The mar...
