The planned economy is when the government has control of the society and makes all the decision. The difference between the planned economy and the marketing economy is that the marketing economy doesn’t have a fixed amount of products which they have to make. The market economy is when the government’s role is limited to providing legislation to protect businesses and consumers and making sure no single business or organisation restricts competition.The planned economy can’t afford any luxury items such as mobile phones and prices are fixed by the government. There is no competition in the planned economy because of the control that the government has over them.
The mixed economy is a combination of both planned and the market economy. The mixed economy shares similar attributes to both planned and market economy because the government controls some of the resources and the market controls the rest which means that both government and businesses have control.2. Explain how market economies benefit from technological innovation.
The market economies benefit from technological innovation because it enables opportunities for the business to create new products. For example business like Vodafone in the past only used the basic function of communication and text for their old models. The new developed models now have features such as:• Touch screen.• Bluetooth.• Web and wifi.• Applications such as Facebook.
• Mp3 player.• Live video communication + picture message.These new developed features for phones allowed businesses like Vodafone to sell more and the demand for the product has increased rapidly. Technological innovation has now become an important role for mobile phones.
Mobile phones in the present are now based on the features it comes with and not the communication. Customers expect to have the basic communication features but demand better features such as applications to make the product worth more. In the marketing economy businesses are motivated to maximise their profits. The marketing economy highly depends on the customers demand for their products and services which affect the amount of supply and pricing for their products. Technological innovation plays a important role when a product demand falls, the business makes less and decrease the price because it allows the business to either create an alternative product or be more efficient when it comes to services.
3. Analyse the relative value of landline and mobile telephones for emerging economies such as Kenya/India.The value of installing landlines in Kenya would be highly expensive due to poor communication systems. People who work in Kenya earn an equivalent of £1 a day.
Over 75% of the country’s workforce is in cultivation which in Kenya it can be affected by weather conditions. Telephone landlines in Kenya are scarce, costly and difficult to install. In the UK we already have the technology available to install landline but in a developing country like Kenya they don’t. Landline and telephone communications can play a big part in developing the country because it will help with the following:• People would be able to get water delivered to them without travelling a long distance. • Businesses would be able to advertise themselves using telephone communication and mouth to mouth.
Because of the cost of installing landlines in Kenya Vodafone set up M-PESA which is cheap and easy to install. The M-PESA enables people in Africa to top up and in return for cash they have credit. They can either store this on their phone or When they need it the credit can be converted back into cash at any registered M-PESA agent. This enables people to not carry a big sum of cash with them.
People are able to pay using their mobile phones for Schools and rent. This also provides a safe way of transferring money back to their families.