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  • Basic Economic Questions: What To Produce?

    Diunggah oleh

    Hani Nazrina
    19 tayangan17 halaman
    This document discusses basic economic questions about what to produce, how to produce, and for whom to produce. It provides examples of different economic systems including market economies, command economies, and mixed economies. Specifically, it describes how China moved from a command economy where the government determined production and allocation, to a more market-based economy after economic reforms in the 1980s and joining the WTO. It also notes that Hong Kong has a mixed economy with private ownership and market allocation as well as some public ownership and government allocation.

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    Judul Asli

    Basic Economic Questions

    Hak Cipta

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    This document discusses basic economic questions about what to produce, how to produce, and for whom to produce. It provides examples of different economic systems including market economies, command economies, and mixed economies. Specifically, it describes how China moved from a command economy where the government determined production and allocation, to a more market-based economy after economic reforms in the 1980s and joining the WTO. It also notes that Hong Kong has a mixed economy with private ownership and market allocation as well as some public ownership and government allocation.

    Hak Cipta:

    Attribution Non-Commercial (BY-NC)
    Unduh sebagai PPT, PDF, TXT atau baca online dari Scribd
    Tandai sebagai konten tidak pantas
    19 tayangan17 halaman

    Basic Economic Questions: What To Produce?

    Diunggah oleh

    Hani Nazrina
    This document discusses basic economic questions about what to produce, how to produce, and for whom to produce. It provides examples of different economic systems including market economies, command economies, and mixed economies. Specifically, it describes how China moved from a command economy where the government determined production and allocation, to a more market-based economy after economic reforms in the 1980s and joining the WTO. It also notes that Hong Kong has a mixed economy with private ownership and market allocation as well as some public ownership and government allocation.

    Hak Cipta:

    Attribution Non-Commercial (BY-NC)
    Unduh sebagai PPT, PDF, TXT atau baca online dari Scribd
    Tandai sebagai konten tidak pantas
    dari 17

    Basic economic questions

    What to produce? How to produce? For whom to produce?

    What to produce?
    Raymond is going to start a restaurant, he

    has to decide what kinds of meals to be made.


    In our school, we have 3 science classes and

    2 arts classes.

    How to produce?
    Concerning production methods

    Use Labour intensive production method or


    Capital intensive production method ?

    Use the LEAST COST production method


    Farming : mainland China, USA Banking: use ATM to reduce cost of staffs

    For whom to produce?


    Who should get how much of what?

    The children, the elderly, the adults?


    Which COMPETITIVE CRITERION

    will be used? By price competition By non-price competition (e.g. waiting, ability, age, lucky draw)

    Economic Systems
    Market economy Centrally planned (command) economy

    Differences
    Ownership of resources Allocation of resources

    Market economy
    Most resources are privately owned Most resources are allocated by the

    market forces (demand and supply)

    Command economy
    Most resources are owned by the

    STATE

    Most resources are allocated by the

    government plans (commands)

    Examples
    Closer to a Market economy: USA, UK,

    Canada, Australia, Taiwan, S Korea, India, Philippines Indonesia. Closer to a Command economy: Mainland China (before 1990s), Russia (before 1990s), Cuba, North Korea, Vietnam

    China (previously a command economy)


    What to produce?

    The central government decides the types

    and quantities of goods/services to be produced The central government orders more cabbages, resulting great surplus of cabbages (1989)

    China (previously a command economy)


    How to produce? Government makes productions plans to

    production units Government provides factors of production to production units Government decides the production methods Great Leap Forward: ask people to recast all ironwares at home

    China (previously a command economy)


    For whom to produce?

    Prices are set by government


    Wages are set by government Competitive criterion: non-price competition Goods or services are allocated by rationing

    (coupons issued to exchange goods or services) Resource allocation : according to political ranks (in the communist party)

    Modern China
    Changes into a market economy Member of World Trade Organisation

    (WTO)

    Are they different in ?


    Living standard

    Income distribution (income gap between

    the rich and poor) Inflation rate Unemployment rate

    Hong Kong is a mixed economy


    Most resources are owned by private individuals

    Most resources are allocated by market forces


    Some resources are owned by the government e.g.

    airport, roads, public estates/schools/hospitals Some resources are allocated by government plans e.g. medical /educational /housing/ social services

    Our governments philosophy


    Non-intervention Positive non-interventionist policy

    Political systems
    Capitalism Communism

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