EC1111 - International Economic Policy Vinay P. Nundlall Seminar 6 Question 1 a) Explain the differences between a market economy and a centrally planned economy. b) Explain what is meant by 'Transition'. Question 2 One of the main reforms in transition economies is price liberalization. Briefly explain how price liberalization affects consumers and producers. (Ignore welfare implication as concepts of Consumer Surplus, Producer Surplus and Pareto Efficiency have not been adequately covered) Question 3 From the article "The Other China", summarise the cost and benefits of the transition from a centrally planned economy to a market economy in China. Discuss and debate around the following topics: Who are the winners and the losers from transition? Is transition good or bad? Question 4 Discuss how transition can become a success. Refer to the case studies of Estonia and other countries where transition was more painful. Further, consider the order in which policies were implemented for transition to work (or not work).