Explain how individual economic decision-making processes are made and identify the limitations that suppress consumer choice in the following economic models:Capitalism (150-175 words)Socialism (150-175)Communism (150-175)Note: Make sure to leave 1 blank line between each answer.You must:Conduct your own researchProvide a minimum of three (3) references, excluding the textSolution PreviewHow Indi
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Explain how individual economic decision-making processes are made and identify the limitations that suppress consumer choice in the following economic models:
Capitalism (150-175 words)
Socialism (150-175)
Communism (150-175)
Note: Make sure to leave 1 blank line between each answer.
You must:
Conduct your own research
Provide a minimum of three (3) references, excluding the text
Solution Preview
How Individual Economic Decision-making process is made in capitalism
The decision-making process in any economic environment involves the
assessment of different factors that affect the final choice that a consumer
makes with respect to the buying of goods and services. These factors vary from
one economic model to the next depending on the characteristics of each model.
This paper analyzes the different processes under different economic models as
well as expounding on the limitations that suppress consumer choices.
Under the capitalism
economic model, consumer decision-making process is a sovereign responsibility
such that the following assumptions are believed to be true; the consumers is
ware of the best alternative that satisfies his needs, consumers decisions
affect the allocation of resources depending on their preferences. Capitalist
models of economy identify with the consumer as the determinant what to buy, in
what quantities. On the other hand, the producers within this economic model
will base their decisions on the trends and preferences that capture consumer
demand. Capitalist models of economies are also associated with scarcity of
resources, such that consumers will always have to make a choice from the
variety of alternatives available in the market. The resultant effect of this
feature is that causes limitations on the number of alternatives that a
consumer can make decisions to choose from (Xu, 2017). The freedom of consumers
is influenced by the unequal disposable income. Despite the notion that
decisions are based on individual preferences, the aggregate combined choice of
consumers determine the price mechanism thus denying other few individuals the
choice they would have made
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