EXAM 3 essay question review

1. Efficiency: Market is more efficient than economic planning. In market, production is based on demand, but in economic planning, production is based on government setting. For example, in a warm winter, a market will cut its production of boots, while an economic planning will not do so, leading to a waste of resource in excess production. 2. Profitability. Market is more profitable than economic planning. In market, companies are owned by individuals, and they have motivation to improve profit. In economic planning, firms are all owned by public, and how much they can earn is determined by government, so there is little incentive for company to cut cost. 3. Economic planning is fairer than market in terms of employment. Economic planning always has full employment, and guarantee jobs for people, while market is unfair for some people who lose their jobs because of a downturn economy or company bankrupt. 4. Economic planning is better for social equality than market. In economic planning, income is distributed equally. However, in market, income distribution is unequal, leading to an increasing in gap of wealth.
2. In general, the more freely and honestly media can communicate, the higher the public confidence in the media will be. Media in democratic countries are freer than that in authoritarian countries, so does the public confidence in the media. However, this relationship is counter-intuitive in some ways. 1. In some authoritarian countries, media is controlled by government, and play a role to educate citizen of government policies, economic development, etc. When people’s view is shaped by authoritarian controlled media, although the media is not free, people are confident in the media. 2. In some democratic countries, liberal media is a fundamental human rights and run for profit. However, some media only aim at attractive audience because they are too profit-orientated; some media can’t tell the truth like a downturn economy because of advertisers’