Econ 202-1 Summary
Principles of Microeconomics: ECON 202-01
“The Purpose of the Different Economies in our Society”
Raquel Moss
Mr. George L. Edwards
July 20, 2012
The Purpose of the different economies is so that society is able to answer the three questions: what, how and who to produce to. Because we live in a society full of scarcity, we face the economic problems of limited economic resources with that being the main issue. The society design and organized our economy into three different categories: Centrally Planned, Market and Mixed Economy. With this type of arrangement the world is able to keep some kind of balance in the market. In November 1917, Valdimir Lenin, established the first communist government and soon sought to take over …show more content…
Russia in revengence of his brothers execution. A communist government is also known as a centrally planned economy. It is an economic system where the government controls and regulates production, distribution, and prices. They basically ultimately decide how the economic resources will be allocated. The decisions are made by the state or government officials rather than by the interaction between consumers and businesses. The most important planned economy is the Soviet Union and they are more concerned in pleasing the government than their consumers. This is a reason why the planned economies have been unsuccessful in producing low-cost in addition to high quality products and services. Even the average person has a low living standard. Planned economies are the toughest economy to live in that is why only a few remain: Cuba, North Korea, and Turkmenistan just to name a few. I am grateful to be living in an economy that at least considers my want and needs. I live in a market economy. A market economy is an economic system that based their economic decisions and the pricing of goods and services by the aggregate interactions of a country 's citizens and businesses. Which means the firms must produce goods and services that meet the wants of their consumers, or their firm will go out of business. I think that this is the better way of monitoring your profits, producing what is in demand according to consumers oppose to producing the resources that you think we should buy or use.
Unlike in planned economies, their consumers ultimately decide what goods and services will be produced. The government has little intervention in this market because market economies primarily rely on privately owned firms to produce the goods and services for them. This is the best thing even though the government has little control, sometimes decisions are better made in a whole, than in the hands of one man. Although recently developed nations are known has market economies, they could and have been classified as a mixed economies also. This is because they allow market forces, they way of running the society, to drive most of their activities, only permitting government intervention to bestow that it is needed to provide stability. A mixed economy is where majority of the decisions are made by the interaction of consumers and also the government plays a significant role in the allocation of resources process. In other words, a mixture of the planned and market economy is where this economy falls, some industries are privately owned and others are publicly owned or nationalized. The mixed economic system combines capitalism and socialism in itself as a characteristic. Capitalism because they encourage businesses to create
their own way of making wealth, and socialism because the government has control over the amount of the resources that are produced and shipped out and the manner in which those funds and efforts are maintained. Mixed economy is by far the easiest economy to part take in, because other regions still face challenges in developing and maintain opportunities making it difficult to achieve the ideal balance between government and private control. China is one country that has slowing migrated to the mixed economy leaving behind the planned economy realizing that they were in economic stagnation because of the type of economy they were practicing. In Conclusion, the purpose of these three different types of economies is very clear and evident. It is very important to know what economy you are govern under before relocating to a different country. The centrally planned being the most controlled government, market having little control from government, and mixed having a mixture of the two best of both worlds. Understanding how the decisions are made in reference to allocating resources and what questions are asked when it pertains to our society and the production of goods and services.
Works Cited
Hubbard, R. Glenn. Third. Boston: Pearson Education, 2006.
"Market Economy." Investopedia. N.p., n.d. Web. 18 Jul 2012. http://www.investopedia.com/terms/m/marketeconomy.asp#axzz217xxynwz Faroog, Umar. "What is Mixed Economy, Advantages and Disadvatages of Mixed Economies." Study Lecture Notes. N.p., December 21, 2011. Web. 10 Jul 2012 http://studylecturenotes.com/management-sciences/economics/244-what-is-mixed-economy-mba-economics-notes Hill, Adam. "What is a mixed economy?." WiseGEEK. N.p., June 18, 2012. Web. July 1, 2012.
http://www.wisegeek.com/what-is-a-mixed-economy.htm
“The Purpose of the Different Economies in our Society”
Raquel Moss
Mr. George L. Edwards
July 20, 2012
The Purpose of the different economies is so that society is able to answer the three questions: what, how and who to produce to. Because we live in a society full of scarcity, we face the economic problems of limited economic resources with that being the main issue. The society design and organized our economy into three different categories: Centrally Planned, Market and Mixed Economy. With this type of arrangement the world is able to keep some kind of balance in the market. In November 1917, Valdimir Lenin, established the first communist government and soon sought to take over …show more content…
Russia in revengence of his brothers execution. A communist government is also known as a centrally planned economy. It is an economic system where the government controls and regulates production, distribution, and prices. They basically ultimately decide how the economic resources will be allocated. The decisions are made by the state or government officials rather than by the interaction between consumers and businesses. The most important planned economy is the Soviet Union and they are more concerned in pleasing the government than their consumers. This is a reason why the planned economies have been unsuccessful in producing low-cost in addition to high quality products and services. Even the average person has a low living standard. Planned economies are the toughest economy to live in that is why only a few remain: Cuba, North Korea, and Turkmenistan just to name a few. I am grateful to be living in an economy that at least considers my want and needs. I live in a market economy. A market economy is an economic system that based their economic decisions and the pricing of goods and services by the aggregate interactions of a country 's citizens and businesses. Which means the firms must produce goods and services that meet the wants of their consumers, or their firm will go out of business. I think that this is the better way of monitoring your profits, producing what is in demand according to consumers oppose to producing the resources that you think we should buy or use.
Unlike in planned economies, their consumers ultimately decide what goods and services will be produced. The government has little intervention in this market because market economies primarily rely on privately owned firms to produce the goods and services for them. This is the best thing even though the government has little control, sometimes decisions are better made in a whole, than in the hands of one man. Although recently developed nations are known has market economies, they could and have been classified as a mixed economies also. This is because they allow market forces, they way of running the society, to drive most of their activities, only permitting government intervention to bestow that it is needed to provide stability. A mixed economy is where majority of the decisions are made by the interaction of consumers and also the government plays a significant role in the allocation of resources process. In other words, a mixture of the planned and market economy is where this economy falls, some industries are privately owned and others are publicly owned or nationalized. The mixed economic system combines capitalism and socialism in itself as a characteristic. Capitalism because they encourage businesses to create
their own way of making wealth, and socialism because the government has control over the amount of the resources that are produced and shipped out and the manner in which those funds and efforts are maintained. Mixed economy is by far the easiest economy to part take in, because other regions still face challenges in developing and maintain opportunities making it difficult to achieve the ideal balance between government and private control. China is one country that has slowing migrated to the mixed economy leaving behind the planned economy realizing that they were in economic stagnation because of the type of economy they were practicing. In Conclusion, the purpose of these three different types of economies is very clear and evident. It is very important to know what economy you are govern under before relocating to a different country. The centrally planned being the most controlled government, market having little control from government, and mixed having a mixture of the two best of both worlds. Understanding how the decisions are made in reference to allocating resources and what questions are asked when it pertains to our society and the production of goods and services.
Works Cited
Hubbard, R. Glenn. Third. Boston: Pearson Education, 2006.
"Market Economy." Investopedia. N.p., n.d. Web. 18 Jul 2012. http://www.investopedia.com/terms/m/marketeconomy.asp#axzz217xxynwz Faroog, Umar. "What is Mixed Economy, Advantages and Disadvatages of Mixed Economies." Study Lecture Notes. N.p., December 21, 2011. Web. 10 Jul 2012 http://studylecturenotes.com/management-sciences/economics/244-what-is-mixed-economy-mba-economics-notes Hill, Adam. "What is a mixed economy?." WiseGEEK. N.p., June 18, 2012. Web. July 1, 2012.
http://www.wisegeek.com/what-is-a-mixed-economy.htm