Essays on How Are Resources Allocated in a Classical Market Economy - Hong Kong Market Economy Case Study

Download full paperFile format: .doc, available for editing

The paper "How Are Resources Allocated in a Classical Market Economy - Hong Kong Market Economy " is a perfect example of a micro and macroeconomic case study.   A classical market economy focuses on the allocation of resources on the basis of private ownership and decentralized decision makings. In this regard, the private sector is accorded the intellectual property rights to engage in resource allocation and distribution for reasons of boosting the market economy. The essentiality and the core of the classical market economy constitute a healthy market competition where producers and consumers have the audacity to exchange goods and services freely.

Groups of individuals and private industries take the center stage in making managerial decisions on how products and services can be allocated at a minimal cost. The private sector enjoys the economic advantage of making a decision about consumers and producers, and this modality plays a fundamental role in determining forces of demand and supply in the allocation of resources. A classical market economy uses the systems of prices in a bid to ascertain the potentiality of a market economy to incur losses and make huge profits.

However, this paper discusses how resources are allocated in a classical market economy. On the same note, the paper presents principles and mechanisms in allocating goods and services in Hong Kong. In a classical market economy, resource allocation is consistent with the fundamental principles of a free market policy in which the production and consumption of goods and services are determined by individuals’ decisions and market forces but not the government. In this context, the private sector evaluates what people spend and the humanities’ financial capability to purchase goods and services.

Besides, the fact that private firms and the household sector contribute to the contextualization of a classical market economy plays a crucial role in understanding the nature and features of the market economy. Managing the concern of resource scarcity and unlimited wants comes out as an essential feature of a market economy.


Arrow, K. Economic welfare and the allocation of resources for invention. In The rate and direction of inventive activity: Economic and social factors (2008 pp. 609-626). Princeton University Press.

Allen, F. 4 Stock markets and resource allocation. Capital markets and financial intermediation, 2010 pp. 81.

Baumol, William, and Alan Blinder. Microeconomics: Principles and policy. Cengage Learning, 2015.

Condorelli, D. Market and non-market mechanisms for the optimal allocation of scarce resources. Games and Economic Behavior 2013 pp. 582-591.

Lipsey, R G and Chrystal, A. Economics, 12th edn, Oxford: Oxford University Press, 2011

Samuelson, P A and Nordhaus, W D. Economics, 19th edn, Boston: McGraw-Hill, 2009

Download full paperFile format: .doc, available for editing
Contact Us