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Explain how resources are allocated in reference to the different economic systems?
An economic system is the result of individuals (consumers and producers), groups (firms, trade unions, political parties, families etc) and the government coming together and interacting in a legal and social society. The function of an economic system is to resolve the basic economic problem - scarcity which means that the resources are limited but wants are infinite. This distribution has three dimensions:
* What is to be produced
* How is it to be produced
* For whom is it to be produced.
There are 2 economic systems which are commonly used world-wide. There are: the free market syst…
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