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mixed economic system
an economy in which both the private and public sectors play an important role
rationing
a limit on the amount that can be consumed
lottery
the drawing of tickets to decide who will get the products
nationalisation
moving the ownership and control of an industry from the private sector to the government
public corporation
a business organisation owned by the government which is designed to act in the public interest
cost benefit analysis (CBA)
a method of assessing investment projects which takes into account, social costs and benefits
multinational companies (MNCs)
companies which produce in more than one country
maximum prices
government may set a maximum ceiling on the price in order to enable the poor to afford basic necessities
minimum prices
to encourage production of a product, a government may set a price floor as it represents the lowest price producers are allowed to charge
advantages of mixed
government takes into account all the costs and benefits that will arise from their decisions
help vulnerable groups ensuring basic necessities
create distribution of income by taxing the rich at a high rate
disadvantages of mixed
risks attached
no guarantee that it will perform better than the other two types of systems
market failure can occur and government intervention may make the situation worse
