The document discusses different types of economic systems:
1. It defines four main types of economic systems - traditional, planned/command, market, and mixed - and explains their basic characteristics and functions.
2. It provides details on the 2020 Index of Economic Freedom, listing the top and bottom scoring countries.
3. It describes traditional economic systems, noting they were centered around customs and relied on bartering, and provides examples of remaining traditional economies.
The document discusses economic systems and defines them as organized ways that societies allocate resources and distribute goods and services. It provides examples of different types of economic systems including capitalist, socialist, mixed economies, and traditional economies. Key components of economic systems discussed include coordination mechanisms, property rights, and incentive systems. Examples are given of both market and planned economic systems.
Here are the classifications:
Macroeconomic issues:
- Economic growth
- Inflation
- Unemployment
- Business cycles
Microeconomic issues:
- Household and firm decision making
- Supply and demand for specific goods and services
- Industry structure and competition
- Wages, prices, profits
So macroeconomics looks at the overall performance and structure of the whole economy, while microeconomics analyzes the decisions and interactions of individual agents within the economy.
This document outlines the key concepts in the chapter on economic systems from a course on economic systems and public administration. It defines an economic system as the set of institutions that determine what goods a society produces, how they are produced, and how they are distributed. It discusses the fundamental economic questions of what, how, and for whom to produce. It also covers concepts like economic activities, resources, the circular flow model, and different types of economic systems including traditional, market, command, and mixed economies.
Macroeconomics examines large aggregates in the economy such as national income, output, employment, price levels, trade balances, and economic growth rather than individual components; it analyzes the relationships between these large-scale factors and how they influence each other on a national or international level.
Applied economics involves applying economic theories and principles to real-world situations to analyze outcomes. It uses econometrics and case studies to empirically test theories. Applied economics is useful for policymakers by providing recommendations based on quantitative analysis of how policies may impact areas like business, labor markets, development and more. It allows testing of economic ideas in practice versus just theoretical discussion.
Microeconomics is the study of individual economic units such as households, firms, and industries. It examines how prices are determined in markets and how resources are allocated. Microeconomics analyzes production and consumption decisions, pricing under different market structures, and resource allocation. The goal is to understand how these economic units interact and the outcomes for efficiency and welfare.
This document discusses markets and the market for medical services. It defines key concepts like supply, demand, price, and market equilibrium. For medical services specifically, it outlines factors that influence supply and demand, like input prices, technology, population trends, and incomes. It also describes features of the medical services market like limited competition, information asymmetry between doctors and patients, quality heterogeneity, and the need for government regulation to help ensure access. Overall, the document provides an introduction to economic analysis of markets through the lens of the market for medical services.
This document provides an overview of microeconomics. It defines economics as the study of how societies allocate scarce resources to produce and distribute goods and services. The document outlines different types of economic systems and explains that most modern economies are mixed, with roles for both markets and governments. It also summarizes key microeconomic concepts like supply and demand, market equilibrium, and the role of prices in signaling resource allocation.
The document discusses economic systems and defines them as organized ways that societies allocate resources and distribute goods and services. It provides examples of different types of economic systems including capitalist, socialist, mixed economies, and traditional economies. Key components of economic systems discussed include coordination mechanisms, property rights, and incentive systems. Examples are given of both market and planned economic systems.
Here are the classifications:
Macroeconomic issues:
- Economic growth
- Inflation
- Unemployment
- Business cycles
Microeconomic issues:
- Household and firm decision making
- Supply and demand for specific goods and services
- Industry structure and competition
- Wages, prices, profits
So macroeconomics looks at the overall performance and structure of the whole economy, while microeconomics analyzes the decisions and interactions of individual agents within the economy.
This document outlines the key concepts in the chapter on economic systems from a course on economic systems and public administration. It defines an economic system as the set of institutions that determine what goods a society produces, how they are produced, and how they are distributed. It discusses the fundamental economic questions of what, how, and for whom to produce. It also covers concepts like economic activities, resources, the circular flow model, and different types of economic systems including traditional, market, command, and mixed economies.
Macroeconomics examines large aggregates in the economy such as national income, output, employment, price levels, trade balances, and economic growth rather than individual components; it analyzes the relationships between these large-scale factors and how they influence each other on a national or international level.
Applied economics involves applying economic theories and principles to real-world situations to analyze outcomes. It uses econometrics and case studies to empirically test theories. Applied economics is useful for policymakers by providing recommendations based on quantitative analysis of how policies may impact areas like business, labor markets, development and more. It allows testing of economic ideas in practice versus just theoretical discussion.
Microeconomics is the study of individual economic units such as households, firms, and industries. It examines how prices are determined in markets and how resources are allocated. Microeconomics analyzes production and consumption decisions, pricing under different market structures, and resource allocation. The goal is to understand how these economic units interact and the outcomes for efficiency and welfare.
This document discusses markets and the market for medical services. It defines key concepts like supply, demand, price, and market equilibrium. For medical services specifically, it outlines factors that influence supply and demand, like input prices, technology, population trends, and incomes. It also describes features of the medical services market like limited competition, information asymmetry between doctors and patients, quality heterogeneity, and the need for government regulation to help ensure access. Overall, the document provides an introduction to economic analysis of markets through the lens of the market for medical services.
This document provides an overview of microeconomics. It defines economics as the study of how societies allocate scarce resources to produce and distribute goods and services. The document outlines different types of economic systems and explains that most modern economies are mixed, with roles for both markets and governments. It also summarizes key microeconomic concepts like supply and demand, market equilibrium, and the role of prices in signaling resource allocation.
This document provides an overview of microeconomics concepts including:
1. Scarce resources force societies and individuals to make choices about production and consumption.
2. Microeconomics analyzes the behavior of individual units like consumers, producers, and markets. It deals with how supply and demand determine prices.
3. Different market structures like perfect competition, monopoly, and oligopoly determine the degree of competition and firms' power to set prices.
This document provides an overview of microeconomics and macroeconomics. Microeconomics examines individual economic agents and how incentives influence their decisions. Macroeconomics considers aggregate indicators for an entire economy such as GDP, inflation, unemployment, and trade balances. It analyzes topics like economic growth, government policies, and the relationships between different parts of the economy. GDP is the total value of all final goods and services produced domestically in a given time period and it equals the total income earned from that production.
𐫱 This file is especially for engineering students.
This is 'economics for engineers'.
I hope it will help you in your studies as well as university exams.😃
This document provides an overview of different economic systems including market economies, planned economies, mixed economies, and traditional economies. It discusses key aspects of each system such as how economic questions around production, distribution, and resource allocation are answered. For example, in a market economy these decisions are driven by supply and demand, while in a planned economy the government controls and directs the economy. The document notes it is important to understand different economic systems because of historical debates around which approach is best and because countries still operate under different models.
This document discusses key economic concepts including the definition of economics, economic wants, and factors of production. It also outlines three main types of economic systems - market, command, and mixed - as well as three economic-political systems - capitalism, socialism, and communism. Finally, it covers fundamentals of capitalism such as private property and price setting, and how governments can measure and manage economic growth.
This document provides an introduction to economics. It defines economics as the study of proper allocation of scarce resources for satisfying human wants and needs. Economics has two main branches: microeconomics, which focuses on individual decision making units like households and firms, and macroeconomics, which looks at the overall economy and factors influencing national income. Positive economics attempts to understand and explain economic behavior without judgment, while normative economics makes judgments on outcomes and policies. The document outlines key economic concepts like scarcity, resources, efficiency and the scientific methods used in economics like observation, analysis and statistics. It concludes by listing various fields within economics.
This document provides an overview of macroeconomics, including definitions, objectives, and methods of measuring national income. It defines macroeconomics as studying an economy as a whole rather than individual markets. The objectives of macroeconomic policies are outlined as maximizing national income to raise living standards. Methods for computing national income are described as the product, income, and expenditure methods. Problems in measuring national income are also discussed. Key terms like gross domestic product, gross national product, and net national product are defined.
The document provides definitions and explanations of key economic concepts:
1. Economics is defined as the study of how people choose to use scarce resources to satisfy unlimited wants. It involves production, distribution, and consumption of goods and services.
2. Scarcity means that resources are limited but wants are unlimited, so choices must be made. Opportunity cost is the next best alternative forgone in making a choice.
3. Demand is a consumer's willingness and ability to purchase a good at a given price, depicted by a downward sloping demand curve. The law of demand states that price and quantity demanded move in opposite directions.
4. A production possibility frontier shows the maximum output combinations of two goods given
Economics can be summarized in three sentences:
Economics studies how individuals and societies make choices to allocate scarce resources for the satisfaction of unlimited wants. It is concerned with production, distribution, and consumption of goods and services. Economics can be studied at both the macro level of whole economies and the micro level of individual agents like consumers and businesses.
This document provides an overview of microeconomics concepts including:
1. Definitions of economics from various sources emphasizing scarcity and choice.
2. The three basic economic problems of what, how, and for whom to produce as well as other problems like efficiency and growth.
3. Types of economies including centrally planned, market, and mixed and their key characteristics.
4. Positive and normative economics and deductive and inductive methods of analysis.
5. Consumer behavior theory including utility, budget constraints, indifference curves, and equilibrium.
This document provides an introduction to microeconomics, including:
1. Definitions of economics from different scholars focusing on wealth, choice-making, and growth.
2. Definitions of microeconomics, which studies individual economic behavior, and macroeconomics, which studies large aggregates.
3. Economics can be studied as a positive or normative science.
4. The four basic economic problems are what to produce, how to produce, for whom to produce, and provisions for economic growth.
1. The document discusses the nature and scope of economics, beginning with early definitions that focused on wealth and their problems, leading to new definitions emphasizing human welfare.
2. It examines Marshall's definition of economics as the study of mankind in attaining material well-being and Robbins' definition of economics as the study of scarce resources and alternative uses.
3. Modern definitions, like Keynes', view economics as the study of income, employment, and resource allocation at both the micro and macro levels.
Microeconomics is the study of individual economic decision-makers and the markets in which they interact. It focuses on factors that affect individual choices and how those choices are coordinated through markets. The three main goals of microeconomics are determining what to produce, how to produce, and for whom to produce. It analyzes the theory of demand, the behavior of firms, and the demand for labor and other production factors. The document provides definitions of microeconomics from various economists and outlines the key concepts that will be covered, including consumer behavior, demand and supply analysis, production and cost analysis, and market equilibrium.
This document outlines the chapter topics for a course on basic economics at Pangasinan State University. The chapter topics include definitions of economics and microeconomics and macroeconomics. It also discusses key economic concepts like scarcity, opportunity costs, economic resources and the three fundamental economic questions about what to produce, how to produce and for whom to produce. The document provides an overview of the course and serves as an outline for the instructor to follow.
This document provides an introduction to microeconomics. It defines microeconomics as the study of individual economic units such as consumers, firms, and markets. The key topics of microeconomics discussed include consumption, production, exchange, distribution, product and factor pricing, and welfare economics. Microeconomics uses partial equilibrium analysis and focuses on price theory to understand how prices allocate resources and goods are distributed. It takes a "worm's eye view" of the economy by examining individual parts rather than the whole system.
This document provides an overview of economics, including microeconomics and macroeconomics. It defines economics as the study of how individuals, markets, and countries seek to maximize satisfaction and profits with limited resources. Microeconomics examines decisions of individuals and businesses regarding prices and resource allocation, while macroeconomics studies whole economies and how government policies affect aggregates like output and inflation. The document also outlines different economic systems, terms, the scope and methodologies of economics, and some basic economic problems around production.
The document discusses how the basic economic problems of what to produce, how to produce, and for whom to produce are solved differently in capitalist, socialist, and mixed economies.
In a capitalist economy, the price mechanism determines solutions through market forces of supply and demand. In a socialist economy, a central planning authority makes production and distribution decisions. In a mixed economy, the price mechanism and private sector interact with government intervention through fiscal and monetary policies to influence economic outcomes.
This document provides an introduction to economic analysis. It discusses positive and normative economics, the interdependence of microeconomics and macroeconomics, and how economic analysis informs typical managerial decisions. The roles of economists, finance managers, and functional areas are also outlined. Production possibility curves are introduced as helping to understand the problem of scarcity.
This document provides an overview of macroeconomics and microeconomics. It defines macroeconomics as dealing with the performance of an entire economy, including concepts like GDP, unemployment, inflation, and macroeconomic models. Microeconomics is defined as studying individual markets and decision-making of consumers and firms, covering topics like supply and demand, costs of production, and market structures. The document also lists various fields that fall under microeconomics such as labor economics, welfare economics, and financial economics.
An economic system is the method a society uses to produce and distribute goods and services. Every society must answer three key economic questions: what to produce, how to produce it, and who gets what is produced. There are four main types of economic systems: traditional, command, market, and mixed. Most modern economies are mixed systems that combine features of market and command economies.
The document discusses different economic systems and their key characteristics. It describes three basic economic systems: the traditional or agrarian system which relies on social traditions; the planned system where the government controls major economic decisions; and the market system where independent actors make decisions. It also discusses mixed systems that combine elements of market and planned systems. Modern economies often follow a mixed system approach with government intervention to address market failures. The document also provides an overview of the Islamic economic system which incorporates Sharia law and aims for equitable distribution of wealth.
This document provides an overview of microeconomics concepts including:
1. Scarce resources force societies and individuals to make choices about production and consumption.
2. Microeconomics analyzes the behavior of individual units like consumers, producers, and markets. It deals with how supply and demand determine prices.
3. Different market structures like perfect competition, monopoly, and oligopoly determine the degree of competition and firms' power to set prices.
This document provides an overview of microeconomics and macroeconomics. Microeconomics examines individual economic agents and how incentives influence their decisions. Macroeconomics considers aggregate indicators for an entire economy such as GDP, inflation, unemployment, and trade balances. It analyzes topics like economic growth, government policies, and the relationships between different parts of the economy. GDP is the total value of all final goods and services produced domestically in a given time period and it equals the total income earned from that production.
𐫱 This file is especially for engineering students.
This is 'economics for engineers'.
I hope it will help you in your studies as well as university exams.😃
This document provides an overview of different economic systems including market economies, planned economies, mixed economies, and traditional economies. It discusses key aspects of each system such as how economic questions around production, distribution, and resource allocation are answered. For example, in a market economy these decisions are driven by supply and demand, while in a planned economy the government controls and directs the economy. The document notes it is important to understand different economic systems because of historical debates around which approach is best and because countries still operate under different models.
This document discusses key economic concepts including the definition of economics, economic wants, and factors of production. It also outlines three main types of economic systems - market, command, and mixed - as well as three economic-political systems - capitalism, socialism, and communism. Finally, it covers fundamentals of capitalism such as private property and price setting, and how governments can measure and manage economic growth.
This document provides an introduction to economics. It defines economics as the study of proper allocation of scarce resources for satisfying human wants and needs. Economics has two main branches: microeconomics, which focuses on individual decision making units like households and firms, and macroeconomics, which looks at the overall economy and factors influencing national income. Positive economics attempts to understand and explain economic behavior without judgment, while normative economics makes judgments on outcomes and policies. The document outlines key economic concepts like scarcity, resources, efficiency and the scientific methods used in economics like observation, analysis and statistics. It concludes by listing various fields within economics.
This document provides an overview of macroeconomics, including definitions, objectives, and methods of measuring national income. It defines macroeconomics as studying an economy as a whole rather than individual markets. The objectives of macroeconomic policies are outlined as maximizing national income to raise living standards. Methods for computing national income are described as the product, income, and expenditure methods. Problems in measuring national income are also discussed. Key terms like gross domestic product, gross national product, and net national product are defined.
The document provides definitions and explanations of key economic concepts:
1. Economics is defined as the study of how people choose to use scarce resources to satisfy unlimited wants. It involves production, distribution, and consumption of goods and services.
2. Scarcity means that resources are limited but wants are unlimited, so choices must be made. Opportunity cost is the next best alternative forgone in making a choice.
3. Demand is a consumer's willingness and ability to purchase a good at a given price, depicted by a downward sloping demand curve. The law of demand states that price and quantity demanded move in opposite directions.
4. A production possibility frontier shows the maximum output combinations of two goods given
Economics can be summarized in three sentences:
Economics studies how individuals and societies make choices to allocate scarce resources for the satisfaction of unlimited wants. It is concerned with production, distribution, and consumption of goods and services. Economics can be studied at both the macro level of whole economies and the micro level of individual agents like consumers and businesses.
This document provides an overview of microeconomics concepts including:
1. Definitions of economics from various sources emphasizing scarcity and choice.
2. The three basic economic problems of what, how, and for whom to produce as well as other problems like efficiency and growth.
3. Types of economies including centrally planned, market, and mixed and their key characteristics.
4. Positive and normative economics and deductive and inductive methods of analysis.
5. Consumer behavior theory including utility, budget constraints, indifference curves, and equilibrium.
This document provides an introduction to microeconomics, including:
1. Definitions of economics from different scholars focusing on wealth, choice-making, and growth.
2. Definitions of microeconomics, which studies individual economic behavior, and macroeconomics, which studies large aggregates.
3. Economics can be studied as a positive or normative science.
4. The four basic economic problems are what to produce, how to produce, for whom to produce, and provisions for economic growth.
1. The document discusses the nature and scope of economics, beginning with early definitions that focused on wealth and their problems, leading to new definitions emphasizing human welfare.
2. It examines Marshall's definition of economics as the study of mankind in attaining material well-being and Robbins' definition of economics as the study of scarce resources and alternative uses.
3. Modern definitions, like Keynes', view economics as the study of income, employment, and resource allocation at both the micro and macro levels.
Microeconomics is the study of individual economic decision-makers and the markets in which they interact. It focuses on factors that affect individual choices and how those choices are coordinated through markets. The three main goals of microeconomics are determining what to produce, how to produce, and for whom to produce. It analyzes the theory of demand, the behavior of firms, and the demand for labor and other production factors. The document provides definitions of microeconomics from various economists and outlines the key concepts that will be covered, including consumer behavior, demand and supply analysis, production and cost analysis, and market equilibrium.
This document outlines the chapter topics for a course on basic economics at Pangasinan State University. The chapter topics include definitions of economics and microeconomics and macroeconomics. It also discusses key economic concepts like scarcity, opportunity costs, economic resources and the three fundamental economic questions about what to produce, how to produce and for whom to produce. The document provides an overview of the course and serves as an outline for the instructor to follow.
This document provides an introduction to microeconomics. It defines microeconomics as the study of individual economic units such as consumers, firms, and markets. The key topics of microeconomics discussed include consumption, production, exchange, distribution, product and factor pricing, and welfare economics. Microeconomics uses partial equilibrium analysis and focuses on price theory to understand how prices allocate resources and goods are distributed. It takes a "worm's eye view" of the economy by examining individual parts rather than the whole system.
This document provides an overview of economics, including microeconomics and macroeconomics. It defines economics as the study of how individuals, markets, and countries seek to maximize satisfaction and profits with limited resources. Microeconomics examines decisions of individuals and businesses regarding prices and resource allocation, while macroeconomics studies whole economies and how government policies affect aggregates like output and inflation. The document also outlines different economic systems, terms, the scope and methodologies of economics, and some basic economic problems around production.
The document discusses how the basic economic problems of what to produce, how to produce, and for whom to produce are solved differently in capitalist, socialist, and mixed economies.
In a capitalist economy, the price mechanism determines solutions through market forces of supply and demand. In a socialist economy, a central planning authority makes production and distribution decisions. In a mixed economy, the price mechanism and private sector interact with government intervention through fiscal and monetary policies to influence economic outcomes.
This document provides an introduction to economic analysis. It discusses positive and normative economics, the interdependence of microeconomics and macroeconomics, and how economic analysis informs typical managerial decisions. The roles of economists, finance managers, and functional areas are also outlined. Production possibility curves are introduced as helping to understand the problem of scarcity.
This document provides an overview of macroeconomics and microeconomics. It defines macroeconomics as dealing with the performance of an entire economy, including concepts like GDP, unemployment, inflation, and macroeconomic models. Microeconomics is defined as studying individual markets and decision-making of consumers and firms, covering topics like supply and demand, costs of production, and market structures. The document also lists various fields that fall under microeconomics such as labor economics, welfare economics, and financial economics.
An economic system is the method a society uses to produce and distribute goods and services. Every society must answer three key economic questions: what to produce, how to produce it, and who gets what is produced. There are four main types of economic systems: traditional, command, market, and mixed. Most modern economies are mixed systems that combine features of market and command economies.
The document discusses different economic systems and their key characteristics. It describes three basic economic systems: the traditional or agrarian system which relies on social traditions; the planned system where the government controls major economic decisions; and the market system where independent actors make decisions. It also discusses mixed systems that combine elements of market and planned systems. Modern economies often follow a mixed system approach with government intervention to address market failures. The document also provides an overview of the Islamic economic system which incorporates Sharia law and aims for equitable distribution of wealth.
The document discusses the economic environment and its impact on business. It defines the economic environment as factors such as economic conditions, economic system, policies, and international economic factors that influence business operations. It describes the primary, secondary, tertiary and quaternary stages of economic activity and how environmental factors like economic, social, political, technological, and demographic elements affect businesses.
The document discusses the economic environment and its impact on business. It defines the economic environment as factors such as economic conditions, economic system, policies, and international economic factors that influence business operations. It describes the primary, secondary, tertiary and quaternary stages of economic activity and how environmental factors like economic, social, political, technological, and demographic conditions affect businesses.
This document provides an overview of economics and key concepts including:
1. Economics is the study of how people and society employ scarce resources to produce and distribute goods and services. Scarcity, choice, and opportunity cost are fundamental concepts.
2. Specialization and exchange are important for economic growth. Specialization allows increased productivity while exchange complements specialization through trade.
3. Economic systems organize production and exchange. Traditional, market, command, and mixed economies are described. Economic growth depends on using resources like land, labor, and capital more efficiently.
4. Barriers to economic growth include insufficient resources, poor infrastructure, and lack of access to export markets. Less developed economies are often in early
This document provides notes for a Master of Business Administration course on Economic Analysis for Business Decisions. It includes an introduction to economics concepts like scarcity, demand, supply, costs and markets. The syllabus outlines topics to be covered like basic economic concepts, demand analysis, cost concepts, and money and capital markets. It also defines key economic terms and models like opportunity cost and the circular flow model. The overall document provides an overview of the concepts and topics students will learn in the course.
This document provides an introduction to principles of economics. It defines economics as concerned with how humans use scarce resources to satisfy unlimited wants. It outlines the main economic resources or factors of production as land, labor, capital and entrepreneurship. It also defines essential versus luxury goods and opportunity costs. Positive economics is described as dealing with what is, while normative economics deals with what should be. Macroeconomics studies the economy as a whole, while microeconomics studies individual parts. The document then goes on to further define and describe the factors of production, scarcity, types of economic systems, opportunity costs, fields of positive and normative economics, and tools and stages of economic analysis.
The document discusses the economic environment and how it affects businesses. It defines economic environment as the various economic conditions, systems, policies, and factors that influence business operations. Some key points made are:
- Economic environment includes factors like income levels, business cycles, productivity, economic system (capitalism, socialism, mixed), and domestic/international economic policies.
- Government economic policies around monetary, fiscal, trade, investment, and industrial policies all shape the business environment.
- The economic environment is dynamic and influenced by macroeconomic trends like inflation, interest rates, and exchange rates both domestically and globally. Understanding the economic environment is important for businesses to operate effectively.
This document provides an overview of the scope and method of economics. It discusses why economics is studied, including to learn a way of thinking, understand society and global affairs, and be an informed citizen. It outlines the key fields of microeconomics and macroeconomics and various subfields of economics. It also explains the difference between positive and normative economics and how economics uses theories and models to understand relationships between economic variables.
This document discusses different economic systems and their key characteristics. It begins by outlining the three basic economic problems of what to produce, how to produce, and for whom to produce. It then defines four main economic systems - traditional, command, market, and mixed - and describes their essential features. The document also distinguishes between the economic philosophies of capitalism, communism, and socialism.
This document discusses different types of economic systems. It defines a traditional economy as one based on customs and traditions where resources are owned by a sovereign. A market economy is based on individual choices where private firms produce for profit. A centrally planned economy gives the government control over production and distribution. A mixed economy incorporates aspects of market and planned systems, with both government and private sectors.
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The document provides an introduction to economic theory. It discusses that economics deals with how humans satisfy unlimited wants with scarce resources. It explains the three elements of basic economic activity: human wants, use of resources like land, labor, capital and entrepreneurship, and techniques of production. It also discusses consumption and the opportunity cost concept. It outlines some economic problems countries aim to solve like unemployment and inequality. It introduces economic analysis, policy, methodology and the construction and functions of economic theory, including price theory, microeconomics and macroeconomics.
The document provides an introduction to the field of economics. It defines economics as the study of how societies allocate scarce resources to produce goods and services. It also distinguishes between microeconomics, which examines individual components like industries and households, and macroeconomics, which examines the overall economy. The scientific approach in economics uses techniques like observation, analysis, and statistical analysis to understand economic phenomena. Some pitfalls to avoid in economic reasoning are failing to isolate variables, making post hoc fallacies, and committing the fallacy of composition. Economics studies scarcity and how it affects production and consumption. Economic knowledge can help individuals, societies, and policymakers.
The document discusses the economic environment and its key components. It begins by defining economic activities as those related to the production and use of income. It then defines the economic environment as the various circumstances and factors that influence an organization's operations. The document goes on to describe the primary, secondary, tertiary, and quaternary stages of economic activity. It also outlines several factors that comprise the economic environment, including economic conditions, systems, policies, legislation, and the international context.
The document discusses four main types of economic systems: traditional, command/planned, free market, and mixed. It defines each system, describes their key features such as motivation and ownership, and analyzes their advantages and disadvantages. Traditional systems are based on customs and subsistence production. Command economies involve centralized state planning and ownership. Free markets rely on private ownership and the mechanism of supply and demand. Mixed systems combine public and private aspects. Examples of each type are also provided.
This document discusses key concepts in economics including the three basic economic problems of what to produce, how to produce, and for whom to produce. It also covers the four factors of production - land, labor, capital, and entrepreneurship. The four main economic systems are described as traditional, command, market, and mixed economies. Other topics include scarcity, opportunity cost, production possibility frontier, and the law of scarcity.
This document discusses key concepts in economics including the three basic economic problems of what to produce, how to produce, and for whom to produce. It also defines four economic systems - traditional, command, market, and mixed - and provides examples of each. Capitalism and socialism are compared as are the concepts of scarcity, opportunity cost, and production possibility frontier.
This document discusses different types of economic systems and how they answer key economic questions. It describes traditional, command, and free market systems. It also introduces the concept of a mixed economy. Key aspects of free market and command economies are outlined. The document also discusses production possibility frontier, opportunity cost, and Adam Smith's invisible hand concept.
Instructions for Macroeconomics Assignment 1 – Spring 2017The fo.docxnormanibarber20063
Instructions for Macroeconomics Assignment 1 – Spring 2017
The following style (30% of the grade) and content (70% of the grade) guidelines apply for the Topic Paper assignments.
* The assignment should be prepared in MS-WORD and submitted as a single attachment to the Blackboard
Turnitin Assignment on or before the due date.
* The assignment submission should contain a Title Page as the first page and it should include:
Students Name
Name of the Course (Current Economic Problems)
Topic of the paper
Date submitted
* The body of the paper should be 4-5 pages in length (this means 4-5 pages that cover the subject in addition to the cover page and references page.
You should
* Provide an overview of each Concept (I – V), in your own words.
* Discuss each concept sufficiently to demonstrate a complete understanding of the concept.
NOTE: Your goal for this assignment is to lay the foundation for analyzing current economic problems/issues. You will use these concepts in your analysis for future assignments.
* The reference page should follow the body of the paper. Your references may include the text. You should use other resources in addition to those provided by the Instructor. Scholarly journal articles are encouraged. If your source is on the web, you should include a link to the website in your references page.
* USE IN-TEXT CITATIONS to avoid plagiarism.
* Double space the text.
* Use 12 point, times new roman font.
* Set all borders at 1”.
* Indent paragraphs.
* Check your spelling and grammar!
* DO NOT USE A BLOG as a source.
* The papers for this class are individual assignments. Do not work in groups when writing the papers.
* LIMIT QUOTES TO LESS THAN 5% OF YOUR TEXT.
Economic Concepts Resources
Concept I. Economics Defined and the Economizing Problem
1. http://www.investopedia.com/terms/e/economics.asp definition and introductory video
2. http://www.whatiseconomics.org/
3. Dr. Reavis’ favorite definition of economics: the study of the allocation of scarce resources.
4. http://www.economicsdiscussion.net/essays/economics/economic-theory-essay-on-economic-theory/807
Concept II. Efficiency vs. Equality:
1. Efficiency vs Equity
by Tejvan Pettinger on November 30, 2010 in economics
A big issue in economics is the trade-off between efficiency and equity.
· Efficiency is concerned with the optimal production and allocation of resources given existing factors of production. See: Different types of efficiency
· Equity is concerned with how resources are distributed throughout society.
Taken from http://www.economicshelp.org/blog/2473/economics/efficiency-vs-equity/
2. Youtube video: https://www.youtube.com/watch?v=ulukrRJdu-I
3. Equity vs. Efficiency: The False Trade-off
Andrew Larkin
In 1975, Arthur Okun published a small book entitled Equality and Efficiency: The Big Tradeoff [1]; since that time if not before, there has been an assumption among many, almost a truism, that such a trade-of.
Similar a Types of Economic Systems_Ashish R Shejwal (20)
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1. 1
Technische Hochschule Nürnberg Georg Simon Ohm
Ohm Professional School
Foundations of Business Administration
Prof. Dr. Thomas Eckardt
Winter term 2020/2021
Topic – Economic systems
By - Ashish Ramchandra Shejwal, Immatriculation Nr. 3591378
Submission date - 21.02.2021
2. 2
Table of Contents
1 Introduction ....................................................................................................................................3
1.1 What is an Economic System? ................................................................................................3
2 Types of Economic Systems............................................................................................................3
2.1 Functions of any Economic System.........................................................................................4
2.2 System non-related Factors of Economic Systems.................................................................4
2.3 2020 Index of Economic Freedom ..........................................................................................5
3 Traditional Economic system..........................................................................................................5
3.1 Pros and Cons of a Traditional Economy ................................................................................6
4 Planned or Command Economic system ........................................................................................6
4.1 System related Factors in a Planned Economy.......................................................................7
4.2 Pros and Cons of a Planned Economy.....................................................................................7
5 Market Economic System ...............................................................................................................7
5.1 System related Factors in a Market Economy ........................................................................8
5.2 Pros and Cons of a Market Economy......................................................................................8
6 Mixed Economic System .................................................................................................................8
6.1 Characteristics of Market Economy in Mixed Economy (Pros)...............................................9
6.2 Characteristics of Planned Economy in Mixed Economy (Pros) .............................................9
6.3 Cons of a Mixed Economy.....................................................................................................10
7 Conclusion.....................................................................................................................................10
8 References ....................................................................................................................................11
9 Self-Declaration.............................................................................................................................12
3. 3
1 Introduction
The purpose of this study to analyse the various forms of economic systems that exist and have existed
throughout the world. There are many functions within a society but the main goal of a civilised society
is achieving well-being of citizens through economic development. Other functions like engineering,
doctor, lawyers. Architectures, etc exist to fulfil the same goal. Throughout history we see many great
civilisations which tried to successfully achieve human well-being by implementing different types of
economic systems. In the present world as well only those nations which have a good economic
system are able to develop new technologies, good education, launch space exploration missions, etc.
1.1 What is an Economic System?
Since the human beings have inhabited this world. There always exist a set of economic rules which
everyone in a civilised society sticks to. These set of guidelines or rules helps a society to control its
activities like production and consumption of goods and services. The economic problems states that
the needs of human beings will always exceed the ability of the society to produce goods and services
to satisfy these needs. And because the resources available within any society are limited, there has
to be a system which regulated the consumption of resources. Now within a economic system, this
can be either achieved by increasing technical efficiency or allocative efficiency or both.
2 Types of Economic Systems
The watershed event is the industrial revolution which began in Europe in the 1700's. Before that
time, we classify all economies as traditional.
Four basic types of economic systems 1
–
1. Traditional economic systems – The system is mainly based on the principle of traditions and
customs.
2. Planned or Command economic system – These are centrally planned and organized by one
ruling entity.
1
Boettke, Peter J. and Heilbroner, Robert L.. "Economic system". Encyclopedia Britannica, 23 Oct. 2020,
https://www.britannica.com/topic/economic-system. Accessed 20 February 2021.
4. 4
3. Market economic systems – Here the central organizing form is the market itself. Market is
controlled solely by people so in a pure market economy, the system is mainly influenced by
people themselves.
4. Mixed economic systems – This system is a mix of above systems. Consumers and markets can
make their own decisions with some government influence.
The basic questions these economic systems try to answer are known as the functions of economic
systems.
2.1 Functions of any Economic System
The five basic functions of an economic system are –
1. How much to produce – This function relates to the questions of exactly what should be the
optimum production quantities.
2. What to produce – This function relates to the decision of what is the most important right
now. Whether to produce capital goods or consumer goods, for import or for export, etc
3. How to produce – This relates to the question of what production techniques should be used
in order to achieve maximum output with low cost, etc.
4. Who consumes – This relates to determining who is going to consume the goods or services?
5. Adaptability – This relates to strengthening of economic system and taking care of whether
the system can overcome various social and economic challenges, etc.
Understanding the functions within a economic system also help in understanding the exact purpose
of any economic system. An economic system which is able to balance all the functions will be
theoretically successful in achieving the well-being of its citizens.
2.2 System non-related Factors of Economic Systems
Any business is determined by some factors which are independent from a specific economic system
and some factor which are a part of a specific economic system. System non-related factors that are
a part of any given economic system are all factors of production, fulfilling the rule of efficiency and
achieving a financial equilibrium. Every economic system consists of labor, capital, physical resources
like natural resources, capital goods, information resources.2
Using the available resources every
economy tries to apply the rule of efficiency of (Output/Input) and achieve maximum efficiency with
2
Thomas Eckardt, FBA01F Chapter1: The Business Environment, Accessed February 20, 2021.
5. 5
the available resources. And by doing so a economy tries to establish a financial equilibrium where
all the economic activities can take place sustainably.
2.3 2020 Index of Economic Freedom
It is a index that is created and published annually by The Heritage Foundation and The wall Street
Journal to measure the degree of economic freedom of countries. Below table 1 shows list of few
countries in decreasing order of their score of economic freedom,3
Key: Free (80-100), Mostly Free (70-79.9), Moderately Free (65-69.9), Moderately Unfree (60-64.9),
Mostly Unfree (50-59.9), Repressed (0-49.9)
Table 1 List of countries withIndex of economic freedom
Country Score Country Score
Singapore 89.4 Germany 73.5
Australia 82.6 Japan 73.3
Switzerland 82 France 66
United Kingdom 79.3 India 56.5
Canada 78.2 Egypt 54
Taiwan 77.1 Brazil 53.7
US 76.6 Cuba 26.9
South Korea 74 Venezuela 25.2
Israel 74 North Korea 4.2
3 Traditional Economic system
This refers to the earliest forms of economies centered around a tribe where each person had a very
specific role to fulfill in the society. The guidelines and working of such a system were mainly
influenced by customs, history and beliefs of the people. These economies depend on fishing, hunting,
farming, etc. They use goods to make a trade instead of monetary currency because there exists no
central system to regulate the flow of such a currency. Currently some examples of traditional
economies can be found in developing countries which are often a part of Africa, Asia, Latin America
3
"Country Rankings: World & Global Economy Rankings on Economic Freedom". www.heritage.org. Accessed
February 20, 2021.
6. 6
and the Middle East.4
Experts believe that every other economic system started initially as a traditional
economy so they expect remaining traditional economies to eventually evolve into command, market
or mixed economies.5
Traditional economies usually only produce goods and services they need
without any surplus. When one traditional economy trades with other traditional economy they rely
on ‘barter’. Where two groups that don’t compete with each other share their own goods with each
other. Goods from one tribe cannot be produced by another tribe so they cannot compete with each
other and hence there is no need for any other currency. Example, one hunting tribe shares meat with
other fishing tribe for fish in return.6
When the tribe starts trading goods with other types of
economies then they have to accept some currency and thus they start evolving into a more
sophisticated form of economic system.
3.1 Pros and Cons of a Traditional Economy
They are the most ecofriendly economic systems.7
Due to less number of people there is usually little
difference of opinions between members. Everyone has a very specific roles and expertise which also
contributes to lessening the disputes. They are a lot more sustainable than any modern industrial
economy. But due to high dependability on weather and nature they can be easily affected by any
changes in nature. Other market and mixed economies also consume the limited natural resource at
a very high rate, so the traditional economies are easily affected by depleting natural resources.
4 Planned or Command Economic system
A pure command economy is termed as a system where all the basic functions of a economic systems
is controlled by one ruling entity. Command economy is sometimes proposed as a way of controlling
hyperinflation. Even though centrally planned economies existed long before Nazi era, the phrase
“command economy” is derived from German word “Befehlswirtschaft” used to describe the fascist
Nazi economy.8
Instead of market forces of supply and demand, it is the ruling entity that decides not
only the quantity of goods to be produced but also who can consume those goods. Citizens have no
right at all to take any economic decision for the society or for their own self. The ruler creates the
4
BC Open Textbook. "Principles of Economics." Accessed February 20, 2021.
5
Economics & Sociology. "Traditional Economies: Innovations, Efficiency and Globalization," Page 65. Accessed
February 20, 2021.
6
Ibid., 62.
7
Ibid., 62.
8
John Eatwell, et al. "Problems of the Planned Economy," Page 58. The Macmillan Press Limited, 1990.
Accessed February 20, 2021.
7. 7
central plan and allocates the resources according to the plan. They have unlimited control over all of
the nation’s resources including labor, natural resources, capital goods, etc. Government owns all of
the businesses and creates laws and regulations on its own.
In the current age there is no example of a pure command economy. But according to 2020 Index of
economic freedom, North Korea has the lowest score of 4.2, followed by Venezuela and Cuba rated
25.2 and 26.9 respectively.9
4.1 System related Factors in a Planned Economy
Three main factors unique to a planned economy are –
1. Central economic planning
2. Rule of plan fulfilment
3. Public ownership 10
4.2 Pros and Cons of a Planned Economy
As all the functions and centrally controlled, it is very easy to mobilize large amounts of resources for
a specific task without following any laws and regulations which is relatively difficult in market or
mixed economy. The ruling entity can transform the society as they want without any restrictions. But
these economies lack innovation as the people are not encouraged to develop new technologies. As
the production is not governed by principles of demand and supply, poor planning can lead to severe
mismatch between the two.
5 Market Economic System
In a pure market economy, the production or goods and services is governed by laws of supply and
demand. Supplies are labour, natural resources and any other resources while the demand includes
purchases by individuals, government, businesses, etc. The businesses are privately owned and the
economy is driven by the competition. Businesses are free to produce whatever and how much soever
they want to produce. Government does not interfere in the economic activities. People are driven by
self-gain. Any business which is not able to compete is eventually closed down and hence market
9
"Country Rankings: World & Global Economy Rankings on Economic Freedom". www.heritage.org. Accessed
February 20, 2021.
10
Thomas Eckardt, FBA01F Chapter1: The Business Environment, Accessed February 20, 2021.
8. 8
economy tends to create income inequality and monopoly. According to 2020 Index of economic
freedom, Singapore has the highest score of 89.4, followed by Hong Kong at 89.1.11
5.1 System related Factors in a Market Economy
Three main factors unique to a planned economy are –
1. Principle of Autonomy
2. Principle of profitability
3. Private ownership12
5.2 Pros and Cons of a Market Economy
Because the production is governed by the supply and demand, the system automatically ensures that
the most demanded goods by consumers are only produced. Hence only those goods which yield a
profit and those highly paid by consumers are produced. To achieve a high profit, the businesses
automatically tend to use the most efficient way to create goods and services. This ensures highest
level of productivity. As the market is driven by fierce competition, there tends to be a lot of
innovation. Technologies are highly developed in market economies. But such a system tends to
ignore less privileged like old aged people, people with disabilities and children. Hence the income gap
between rich and poor goes on increasing in the long run as there is no government interference to
tackle the self-gain motives of human beings.
6 Mixed Economic System
These are economic systems that combine all the above-mentioned systems to achieve a balance
between the respective advantages and disadvantages by removing the weaknesses of free market
economy by certain government intervention. Majority of the developed and developing countries
throughout the world have evolved into mixed economies over time.
Following table 2 shows how degree of competition varies between a Market economy and a Planned
economy,13
11
"Country Rankings: World & Global Economy Rankings on Economic Freedom". www.heritage.org. Accessed
February 20, 2021.
12
Thomas Eckardt, FBA01F Chapter1: The Business Environment, Accessed February 20, 2021.
13
Thomas Eckardt, FBA01F Chapter1: The Business Environment, Accessed February 20, 2021.
9. 9
Table 2 Degree of competitiveness in different situations
Characteristic Perfect
competition
Competition Oligopoly Monopoly
Number of
Competitors
Many Many, but fewer
than perfect
competition
Few None
Ease of Entry into
Industry
Relatively Easy Fairly easy Difficult Regulated by
government
Similarity of
Goods or
Services offered
by Competing
Firms
Identical Similar Can be similar or
different
No direct
competition
Level of Control
over Price by
individual Firms
None Some Some Considerable
Example Local farmer Grocery Store Auto industry Public utility
6.1 Characteristics of Market Economy in Mixed Economy (Pros)
1. Prices are determined by the principles of demand and supply. But with certain governmental
intervention to avoid monopoly and to overcome disadvantages for the underprivileged.
2. It enables private ownerships of business and is driven by self-gain motivations of owners. But
under they have to follow certain sets of rules and regulations formed by the government.
3. People are free to buy, sell, work, produce whatever they want without any restriction.
4. Interference of government is only for protecting competition from monopoly and ensuring
that every individual can enjoy access to the market.
6.2 Characteristics of Planned Economy in Mixed Economy (Pros)
1. Governmental budget outline determines priorities for well-being of its citizens and makes a
central plan.
2. Certain departments like making laws and regulations, military, international affairs, etc are
controlled by the government.
3. Government controls some of the businesses.
10. 10
4. Governments can control resources through increasing and decreasing taxes, subsidies, etc.
6.3 Cons of a Mixed Economy
Sometimes if government emphasizes too much on any above-mentioned positive aspects then it can
cause a disadvantage. For example, If government focusses too much on competition then it can
unknowingly increase the income inequality and hence less competitive can be left without any
government support. Centralised planning by government can create problem if government owned
industry becomes a monopoly or oligarchy system.14
7 Conclusion
Thus, from the above study it can be concluded that none of the economies are in their pure forms
are as efficient as the mixed economy. Even though the traditional system is highly sustainable it is
impossible to put it in practise in the current age of industrialisation and globalisation. Every economy
will or must evolve into a mixed economy in order to achieve the goal of well being of each and every
citizen. This evolving of economies into mixed economies is also because leaders of most of the
countries eventually realise that their people are best served through international trade.15
14
Paul A. Samuelson. “Economics,” Page 691. McGraw Hill Education, 2010.
15
Econlib. “Comparative Advantage,” Accessed February 21, 2021.
11. 11
8 References
Country Rankings: World & Global Economy Rankings on Economic Freedom". www.heritage.org.
Accessed February 20, 2021
John Eatwell, et al. "Problems of the Planned Economy," Page 58. The Macmillan Press Limited, 1990.
Accessed February 20, 2021
Econlib. “Comparative Advantage,” Accessed February 21, 2021
Economics & Sociology. "Traditional Economies: Innovations, Efficiency and Globalization," Page 65.
Accessed February 20, 2021
Thomas Eckardt, FBA01F Chapter1: The Business Environment, Accessed February 20, 2021
Paul A. Samuelson. “Economics,” Page 691. McGraw Hill Education, 2010
BC Open Textbook. "Principles of Economics." Accessed February 20, 2021
12. 12
9 Self-Declaration
"I assure that I have written the paper independently, have not submitted it elsewhere for examination
purposes, have indicated all sources and aids used, and have marked verbatim and analogous quotations as
such"
Ashish Ramchandra Shejwal
21.02.2021