Mixed economic system
Introduced| English | Meaning |
|---|---|
| mixed economy/mɪkst ɪˈkɒnəmi/ | An economy combining market allocation and private ownership with government intervention and public provision. |
| private sector/ˈpraɪvət ˈsektə/ | The part of the economy owned and operated by private individuals or organisations rather than government. |
| public sector/ˈpʌblɪk ˈsektə/ | The part of the economy owned or controlled by government. |
| public goods/ˈpʌblɪk ɡʊdz/ | Goods that are non-rival in consumption and non-excludable under the economic definition. |
| merit goods/ˈmerɪt ɡʊdz/ | Goods whose benefits consumers may underestimate, resulting in consumption below a socially desirable level. |
| subsidises/ˈsʌbsɪdaɪzɪz/ | subsidises |
| redistributes/ˌriːˈdɪstrɪbjuːts/ | redistributes |
| inequality/ɪniːˈkwɒlɪti/ | An unequal distribution of a quantity, opportunity or outcome between people or groups. |
The best of both worlds?
- Pure markets ignore pollution and the poor. Pure planning is slow and wasteful.
- Almost every country picks a middle path — the mixed economic system.
Economics case lab
Classify real examples by the economic idea they show.
A mixed economy combines:
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Markets allocate most resources; the government corrects failures.
Firms and markets make up the ______ sector of a mixed economy.
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The private sector contrasts with the government-run public sector.
What a mixed economy 混合经济 is
- A mixed economy combines a private sector 私营部门 (firms, markets) with a public sector 公共部门 (government).
- Markets do most of the allocating; the government corrects failures and provides essentials.
A mixed economy combines private businesses with a government sector
In a mixed economy, the government typically: (Select all that apply.)
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It corrects failures and provides essentials, but does not plan every price.
Healthcare and education funded by the state are examples of:
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Merit goods are under-consumed if left to the market, so the state provides them.
What the government does
- Provides public goods 公共物品 (defence, roads) and merit goods 有益物品 (schools, hospitals).
- Taxes harmful goods, subsidises 补贴 beneficial ones, and redistributes 再分配 income to reduce inequality 不平等.
More government intervention can improve equality but risk inefficiency.
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The mixed economy balances efficiency against fairness.
Finding the balance
- More government → more equality and correction, but risk of inefficiency.
- More market → more efficiency and choice, but more failure and inequality.
Worked example. The UK runs markets for most goods but funds the NHS and state schools from taxes — a classic mixed economy balancing efficiency with fairness.
You've got it
- a mixed economy = private markets + a public sector
- government provides public/merit goods, taxes harms, subsidises benefits, redistributes
- the balance trades efficiency against equality and correcting failure