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Write an essay to answer the following question:
How are resources allocated in a classical market economy? What are the principles and mechanisms of allocating goods and services in Hong Kong?
How should you interpret this question?
The question asks for a discussion of the nature and features of a market economy. You should explain how resources are allocated and price is determined in this type of economy. In light of your explanation, try to discuss to what extent the Hong Kong economy is a market economy.
In approaching the second part of the question, you need to bear in mind that in Hong«. Kong (as well as in any economies), the provision of some goods and services is not solely determined by the market forces - government intervention always exists. The main concerns are how, when and why. You are recommended to give up-to-date examples to illustrate your arguments.
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