Economic Systems of Resource Allocation
The problem of resource allocation is universal as every nation has to tackle the issue of determining what is produced, how it’s produced and for whom goods and services are produced. In short, the economist studies: who gets what (when) and how. The answers they discover vary around the world according to the economic system in use. In Figure 2.1 we begin the explanation by introducing two idealised systems: the free market model and the centrally planned model.