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Factors of Production Essay Topics & Paper Examples

Modern Market Economies and the Allocation of Factors of Production

Market economies, actually mixed economies, pride themselves on efficiency. The market so writers like Hayek have long held, is the only means of synthesizing the desires and demands of billions of individual consuming units. But the actual mechanics of this transformation still remain controversial. In terms of “mechanics,” the economy must have the means at its disposal of translating the desires of billions of consumers into the allocation of resources of producers. It is not enough to hold that consumer demand is signaled by prices. This approach is accurate, but highly simplistic, more needs to be added to prices as such in terms of translating demand. Hence, this brief description will deal with a few variables in the mechanics of…