Question 1 Answer: Under the mixed economy of three systems which have been desc

ribed in Chapter 3 by Sloman and Norris (2008), the price would be controlled ne
cessarily if high prices were to be avoided. Because the modern industrial count
ries are more properly described as ¡®mixed economies¡‾, meaning that goods and services
are allocated by a combination of free markets, regulation and other forms of c
ollective control, and it makes sense to refer to such systems as free-market ec
onomies, because people are, for the most part, free to start businesses, to shu
t them down, or to sell them (Frank & et.al 2009). Moreover, within broad limits
, the distribution of goods and services is determined by individual preferences
backed by individual purchasing power, which, in most case, comes from the inco
me people earn in the labor market (Pugel 2007). Due to both of the free-market
and command economies have the some important problems, such as high price canno
t to controlled, which lead almost all the real-world economies to be a mixture
of the free-market and command systems, then, the relative prices of goods and i
nputs can be used taxing or subsidizing, even controlled and intervened price di
rectly by governments.
Business can be operated in such a mixed economy system by opportunities, becaus
e the relative merits of this system has better political and economic goals wit
h liberty, equality, efficiency in production, the fulfilling of consumer wishes
, economic growth and full employment, which compared with free-market economy a
nd central planned economy.
References:
Frank, R.H.& Jennings, S & Bernanke, B.S. 2009, Priciples of Microeconomics, McG
raw-Hill, Irwin, Australia.no.2.
Pugel, A 2007, International Economics, McGraw-Hill Irwin, NewYork, America, no.
13.