In a planned economy, the absence of market signals like price fluctuations can lead to inefficiencies in resource allocation. To mitigate this, some planned economies attempt to mimic market signals through various mechanisms. One approach is to use pseudo-market structures, where internal prices are set by the government to simulate supply and demand conditions. These prices, although artificial, help in allocating resources within the economy and in making production decisions. Another method is the use of surveys and consumption data to estimate demand and adjust production accordingly. Additionally, some planned economies engage in limited forms of decentralised decision-making, allowing state-owned enterprises some autonomy to respond to local conditions and requirements. These methods, however, often lack the dynamism and efficiency of real market signals and may not fully capture consumer preferences or encourage innovation and competition to the same extent.

The impact of economic systems on the distribution of income and wealth is significant and varies markedly between systems. In market economies, income and wealth distribution is largely determined by market forces. Factors like individual skills, education, investment decisions, and entrepreneurial success play a significant role. This often leads to substantial income inequality, as rewards are unevenly distributed based on market value. In contrast, planned economies aim for a more equitable distribution of wealth and income. The government often sets wages and controls resource allocation, striving for social equality and reducing disparities. However, this can sometimes lead to inefficiencies and a lack of incentives for individuals to excel. Mixed economies try to balance these extremes. While they allow market forces to influence income and wealth distribution, governments in mixed economies often intervene with progressive taxation, social welfare programs, and regulations to reduce inequality and provide a social safety net.

The balance between government intervention and market freedom in a mixed economy is typically determined through a combination of political, economic, and social factors. Political ideology plays a significant role, as different political parties or leaders may have varying views on the extent of government involvement in the economy. Economic factors, such as the level of development, economic crises, or market failures, also influence this balance. For instance, during economic downturns, governments might increase their intervention to stimulate growth. Social factors, including public opinion, social welfare objectives, and equity considerations, are also crucial. Public demands for greater social security, healthcare, or education often lead to increased government involvement in these areas. Lastly, international influences, such as global economic trends, trade agreements, and economic models from other countries, can shape the approach a mixed economy takes in balancing state and market roles.

Switching from one economic system to another is a complex and often challenging process, fraught with economic, social, and political hurdles. Such transitions are usually driven by significant political changes, economic crises, or a fundamental shift in societal values. A country moving from a planned to a market economy, for instance, faces the challenge of privatising state-owned enterprises, establishing a legal framework for a market-based economy, and creating regulatory bodies. This transition can lead to short-term economic hardships, such as increased unemployment and social unrest. Conversely, transitioning from a market to a planned economy involves nationalising private assets and establishing mechanisms for central planning, which can be resisted by those who benefit from the existing system. In both cases, the shift requires substantial changes in institutional structures, legal frameworks, and often a complete overhaul of economic policies and practices. Additionally, managing the social and political aspects of such transitions is critical, as they can lead to significant upheaval and require broad public support and effective governance to be successful.

Market economies often struggle with addressing environmental degradation and public health issues, as these are classic examples of market failures. In a pure market system, there's little incentive for firms to internalise the costs of environmental damage or public health concerns, as these don't directly affect their profits. However, governments in market economies can intervene to correct these failures. They do this through regulations, taxes, and subsidies. For instance, a government might impose a tax on pollution (a negative externality) to make firms bear the true cost of their actions. Similarly, subsidies might be provided for renewable energy sources to encourage cleaner production methods. Governments also implement laws and regulations to maintain public health standards, such as sanitation standards, food safety regulations, and healthcare policies. These interventions are crucial for addressing issues that the free market, on its own, fails to resolve effectively.