1. Name the three main types of economy. Briefly describe the differences between the three.
The three types of economy are:
1. Planned economy
2. Market economy
3. Mixed economy
The differences between the three types of economies are:
The planned economy is when the government has control of the society and makes all the decision. The difference between the planned economy and the marketing economy is that the marketing economy doesn’t have a fixed amount of products which they have to make. The market economy is when the government’s role is limited to providing legislation to protect businesses and consumers and making sure no single business or organisation restricts competition. The planned economy can’t afford any luxury items such as mobile phones and prices are fixed by the government. There is no competition in the planned economy because of the control that the government has over them. The mixed economy is a combination of both planned and the market economy. The mixed economy shares similar attributes to both planned and market economy because the government controls some of the resources and the market controls the rest which means that both government and businesses have control.
2. Explain how market economies benefit from technological innovation.
The market economies benefit from technological innovation because it enables opportunities for the business to create new products. For example business like Vodafone in the past only used the basic function of communication and text for their old models. The new developed models now have features such as: • Touch screen
• Web and wifi
• Applications such as Facebook
• Mp3 player
• Live video communication + picture message
These new developed features for phones allowed businesses like Vodafone to sell more and the demand for the product has increased rapidly. Technological innovation has now become an important role...