1.

Market Economy:

a) Advantages: A market economy offers individuals the freedom to pursue their own
economic interests and make independent choices. This system promotes efficiency
as prices are determined by supply and demand, guiding resource allocation. It also
encourages innovation and competition, fostering economic growth and
development.
b) Disadvantages: Income inequality can be a drawback of market economies, as wealth
tends to concentrate in the hands of a few. Market failures, such as monopolies and
externalities, can hinder optimal resource allocation. Additionally, certain essential
services may not be accessible to all members of society.

2. Planned Economy:

a) Advantages: Command economies enable centralized planning, which allows for

rapid industrialization and resource mobilization. They aim to reduce income
inequality and ensure equal access to essential services for all citizens. Stability and
predictability in terms of employment and resource allocation can be achieved under
this system.
b) Disadvantages: Lack of individual incentives in command economies can lead to
reduced productivity and innovation. The absence of competition may result in
inefficiencies and a lack of responsiveness to consumer preferences. Information
gaps and delays in decision-making can occur due to the centralized nature of the
economy.

3. Mixed Economy:

a) Advantages: Mixed economies strive to strike a balance between efficiency and equity.
They combine the advantages of market economies, such as resource allocation based
on market forces, with the advantages of command economies, such as social safety
nets and government intervention to address market failures. Mixed economies are
adaptable to changing circumstances and prioritize social welfare.
b) Disadvantages: The presence of government regulations and intervention in mixed
economies can impose a regulatory burden on businesses, potentially hindering their
growth and competitiveness. Balancing the interests of various stakeholders can be a
complex task, leading to policy conflicts and challenges in decision-making. Uncertainty
may arise as businesses navigate between market forces and government policies.