10 Differentiate between planned & free economies. [6]

[Sir Afzal Shad]

Q10 Differentiate between planned & free economies. [6]

Possible Structure:
[KN]
[AN]
[AN+]

[KN]
[AN]
[AN+]

[Syed Mustafa Ali]

[KN] In a planned economy, the government or a central authority exercises significant control over the allocation of resources, production, pricing, and distribution of goods and services. While in a free economy, also called a market economy, economic decisions are primarily driven by market forces, with minimal government intervention.
[AN] In a planned economy the government typically determines what to produce, how much to produce, and who receives the products.
[AN+] In a free economy producers and consumers make choices based on supply and demand, and prices are typically determined by the market.
[KN] In a planned economy central planning authorities decide how resources, labor, and capital are allocated. While in a free economy also called a market economy, economic decisions are primarily driven by market forces, with minimal government intervention.
[AN] In a planned economy this can lead to a more coordinated, but potentially less efficient, allocation of resources.
[AN+] In a free economy resources flow to where they are most valued, which can lead to greater efficiency but may result in income inequality.

[Areena]

In planned economy decisions about economic activities are taken by government or some central authority. while in case of free market economy decisions are depend on the market forces.
therefore in planned economy the government determines how resources are allocated based on its priorities and objectives. In a free economy, resources are allocated based on market forces, such as supply and demand.

In free market economy Individuals has freedom to produce what ever they want
In a free economy, individuals have the freedom to own property, start businesses, and engage in economic activities without excessive government interference. But in a planned economy, individual freedom may be limited as the government controls economic decisions.This is because the government manages all the decisions and activities in the economy. Thus, people do not have the capacity or freedom to choose what to produce, For whom to produce or where to produce

[khuram khan]

{KN} Planned economies are those that work according to the rules and regulations that are set by the government whereas free market economies work by the forces of demand and supply
{AN} Hence in a planned economy the government usually decides the economic question on what to produce, how to produce, as well as for whom to produce whereas in a free market economy, the product that is being demanded by the local is usually made without any interference of the government
{AN+} Thus the chance of market failure is higher in a free market economy rather than in a planned economy fully regulated by the government

{KN} Freedom of production of output
{AN} In a free market economy the producers have the choice to make whatever they want whereas in a planned economy the output to be produced is already pre-decided by the government and no one can deny their command
{AN+} Thus more people are attracted to the free market economy as there is an incentive to make more profit through selling of goods required in the economy and as a result, there is a large of firms in the free market economy rather than the planned economy

[Hadia Zia]

[KN] Planned economies are owned and controlled by govt and operate according to the govt ,whereas FME are owned and controlled by private individuals and they take decisions regarding various things in it.
[AN] moreover in Planned economy govt main aim is welfare of people so things are produced according to this aim however on the other side whatever people demand producers start producing it.
[AN+] thus planned economies keep external benefits as their first priority whereas FME only care about earning large sum of profits.

[KN] There is alot of wastage of resources in Planned economy as sometimes more people are employed than needed because of the aim of welfare but in FME there is very less or no waste produced as main focus is on consumer demand.
[AN] this lead to inefficiencies and misallocation of resources in planed economy but in FME, this cannot be endured and so competition and market forces drive it.
[AN+] Thus ,this leads both the economies to completely different paths as one aims for well being of consumers and other about its profit margins.

[Syed Raza]

[KN] Planned economy is mostly owned and controlled by government sector whereas free market economies are mostly owned and controlled by the private sector.
[AN] in planned economy government try's to focus more on th consumers and welfare of the country.
[AN+] thus this leads to more goods being produced for people. Whereas in free market they intend is to make high profits

[KN] Freedom of what should be produced
[AN] in planned economy the goods produced are set by the government whereas in FME goods are produced whatever they want.
[AN+] thus more people are attracted towards FME because they have various choices but in planned economy they don't have any choices

[Maham fatima]

[KN] In a planned economy resources are owned and controlled by govt. whereas in a FME private individuals own are control all the resources
[AN] therefore in a planned economy more resources are devoted for welfare of the society .On contrary in FME private firms are likely to produce what is more in demand
[AN] therefore it takes time for a planned economy to shift its resources quickly and may make businesses inefficient however FME can easily reallocate resources to save time and cost

[kn] In a planned economy all firms are state owned so there are no chances of development of a monopoly however In a FME there is high level of competition and firms with very low long run average costs can become a monopoly
[AN] thus there is no threat of high prices to consumers whereas in a FME monopolies may charge high prices for low quality products (bcz of inelastic demand)to exploit customers
[an] consequently SOLS of low incomed consumers are adversely effected in a FME

[Kumail Alvi]

[KN]Freedom of production
[AN]In a free-market economy, producers enjoy the freedom to decide what to manufacture, while in a planned economy, the government dictates the production quotas, and no one can challenge their directives.
[AN+]Consequently, the free-market system attracts more participants, driven by the potential for higher profits from selling in-demand goods, leading to a greater number of businesses compared to the planned economy.


[KN]In a planned economy, the government owns and manages resources, while in a free-market economy (FME), private individuals have control over these resources.
[AN]As a result, in a planned economy, a greater emphasis is placed on dedicating resources to the well-being of society. Conversely, in an FME, private firms tend to produce goods and services based on market demand.
[AN+]This divergence in resource allocation methods implies that a planned economy may face challenges in swiftly adjusting its resource distribution, potentially leading to inefficiencies in businesses. In contrast, an FME has the advantage of being able to quickly and cost-effectively reallocate resources as needed.

[Ayesha imran]

[kn] all decisions are made by the government in planned economies acording to welfare of the people, in free economies all decisions are made by firms themselves accordding to what customers demand
[an] recources are allocated according to what people demand in free economies, in planned economies recources are allocated according to the benefit of people
[an+] in a free mkt economy ferms are more responsive to changes in mkt demand as compared to planned
[kn] no gvt intervention in FME, govt intervention in planned eco
[an] in planned economy external costs are taken into account, in FME they are completely ignored
[an+] therefore it is cheaper for firms to operate in an FME as compared to planned as in an FME govt does not impose taxes etc to encourage firms to reduce causing external costs

[hafsa kashif]

[kn] a planned economy is where the govt takes control over all aspects of the economy including prices of goods and services while free economy is where the individuals and businesses make all the decisions on what to produce how to produce and whom to produce for
[an] planned economy makes sure that everyone has access to essential goods and services regardless of their ability to pay while in free market economy their is more focus on innovation and competition which may cause income inequalities and other social problems like poverty.
[kn] in a free market economy firms are more responsive to changes in market demands as compared to planed
[an] as resources are allocated according to demand on consumers in fme while in planned economies resources are allocated according to the benefit they bring to the people

[Salman Khalid]

[KN] In a planned economy, the government or a central authority exercises significant control over the allocation of resources, production, pricing, and distribution of goods and services. While in a free economy, also called a market economy, economic decisions are primarily driven by market forces, with minimal government intervention.
[AN] In a planned economy the government typically determines what to produce, how much to produce, and who receives the products.
[AN+] In a free economy producers and consumers make choices based on supply and demand, and prices are typically determined by the market.

[KN] In a planned economy resources are owned and controlled by govt. whereas in a FME private individuals own are control all the resources
[AN] therefore in a planned economy more resources are devoted for welfare of the society .On contrary in FME private firms are likely to produce what is more in demand
[AN] therefore it takes time for a planned economy to shift its resources quickly and may make businesses inefficient however FME can easily reallocate resources to save time and cost

[khadija nasir]

[kn] a free economy is one which is independent in which the government intervenes lightly whereas planned economies consist of the government having all control over desicions
[an] objectives are to make profits influenced by the customers demands in free market while planned economies focus more on necessities
[an+] constant competition in free market and lack of variety of wants in planned economies

[kn] resources are allocated according to customer demand while a wastage of resources may be caused in planned economies
[an] chances of exploiting customers is higher in free market as they can charge as much as thyd like however in planned, general prices are set
[an+] chances of monopolies forming in free market

[Sarah Shahzad]

(Kn) in a planned the economy ownership is in the governments, hand, whereas a free economy is controlled by individuals. (An) in a panned economy, government decides what to produce how to produce and the prices and in free economy decisions are made by private individuals.

(Kn) a planned economy has very low to none competition whereas a free economy has high competition (an) this can be because a planned economy provides essentials and is owned by the government and a free economy has many private individual who may be producing the same product even.

[Humzah Zafar]

[KN] Planned economy is mostly owned and controlled by government sector whereas free market economies are mostly owned and controlled by the private sector.
[AN] free market economies aim to maximize profits whereas planned aim to fulfill demands of general public
[AN+]Thus prices may be higher in free economy

[KN]monopoly may develop
[AN]in a planned economy a monopoly may develop whereas due to high competition in free market, monopolies cannot develop
[AN+]Thus prices may be controlled in free market economy due to competitive pressure

[Ibrahim Aamir]

[KN] In the free market economy the the induvial are the owners where as in the planned economy all the resources are under the government
[AN] in planned economy the government decides what to produce and what is better for the public whereas in a free market economy the producers produce what ever is demands
[AN+] thus in planned economy the merit goods are produced and on free market economy there is no one to stop the production of de merit goods

[KN]high amount of wastage of in planned economy whereas the lowest wastage in free economy
[AN] the governments many aim is not to gain profit so wastage is not concern where as in free market economy their main aim is to produce profit so they will be highest efficient as possible
[AN+]Thus this shows that they have different aims