Zusammenfassung der Ressource
Basic Economic Problem
- Scarcity
- Opportunity Cost
- Next best alternative foregone when a choice is made
- Econoic Systems
- Market System
Anmerkungen:
- Pure market systems are free of government intervention. Price mechanism is how the three questions are answered which makes the consumer soveriegn. Price acts as a signal, rationing device and incentive and can transfer preference. Firms respond to increased demands to achieve profits. The invisible hand. Assumption is consumers aim to maximise utility
- Centrally Planned
Anmerkungen:
- 100% government influence and the 3 questions are attempted to be answered by them. Failed experiments in Soviet Union and China - Communists. No consumer or producer soveriegnity. Government decides what, how and for whom the produce goes to. Profit is not an objective. Factories get production targets.
- Advantages
Anmerkungen:
- From each according to ability, to each according to need.
Equality
No profit so not exploitation
- Disadvantages
Anmerkungen:
- Bureaucratic
Slow decisions
Unequal
Government does not/cannot know what everyone needs
Laziness and low productivity as no profit incentive
- Mixed Economy
Anmerkungen:
- Blend of market and planned economies. Quantity varies massively. Most ecnonomies are mixed. Most efficient as benefits of both government intervention and market forces.
- Not enough resources to satisfy human wants and needs
- 3 fundamental economic questions
- What to produce?
- How to produce?
- For whom ar ehte goods produced?