Atlskillz checking in to talk a little bit to talk about marketing and our economic system. Every economic system has the economic problem of determining how to use its natural resources. In a planned economy, such as north Korea, the government decides the economic questions. In a private enterprise, or capitalist, system, such as in the United States or Japan, the people (consumers, business owners, and workers), make the economic decisions. These decisions interact in the marketplace and create our ever changing economy. This change in our economy is possible because the bulk of capital is privately owned by people themselves and not by the government. However the decisions of the marketplace are subject to laws and regulations of our government. Here are the three basic questions every economic system must deal with.
- What goods and services should be produced?
- How should they be produced?
- How should they be distributed?
What should be produced?
In a planned economy, the government decides. In a private enterprise, the choice is the consumers and producers, determine the goods and services to be produced. In the united States, however the peoples choices are some what restricted. Products such as some narcotics, can not be legally produced. the production of some products such as cars and medicine, is regulated for safety by the government.
How should it be produced?
Productions is the process of creating or improving goods and services. An economic system must decide how to produce goods efficiently, and thus make the best use of its resources. A production method might require a great deal of hand labor but only a little bit capital. If the hand labor was replaced with machines, there would be savings in labor but increased capital required to purchase the machines. In a planeed economy, the government either owns the means of production or decides who will own them. It also decides how to use the nations resources. In a private enterprise economy, business people decide which resources they will employ, although they are not always free to make such decisions. Safety laws, for example, might prevent them from using less expensive but more hazardous equipment in the work place.
How should it be distributed?
Division of available goods and services is important to a sound economy. Who will get what, if there is not enough who gets some and who doesn't. In a planned economy, the government decides who gets what and how distribution is to be made. In a private enterprise, goods and services are distributed according to personal income. The more you earn, the more you can buy. Taxes are used in part for such programs as welfare and social security which help provide the poor with goods and services.
In a planned economy, the government decides. In a private enterprise, the choice is the consumers and producers, determine the goods and services to be produced. In the united States, however the peoples choices are some what restricted. Products such as some narcotics, can not be legally produced. the production of some products such as cars and medicine, is regulated for safety by the government.
How should it be produced?
Productions is the process of creating or improving goods and services. An economic system must decide how to produce goods efficiently, and thus make the best use of its resources. A production method might require a great deal of hand labor but only a little bit capital. If the hand labor was replaced with machines, there would be savings in labor but increased capital required to purchase the machines. In a planeed economy, the government either owns the means of production or decides who will own them. It also decides how to use the nations resources. In a private enterprise economy, business people decide which resources they will employ, although they are not always free to make such decisions. Safety laws, for example, might prevent them from using less expensive but more hazardous equipment in the work place.
How should it be distributed?
Division of available goods and services is important to a sound economy. Who will get what, if there is not enough who gets some and who doesn't. In a planned economy, the government decides who gets what and how distribution is to be made. In a private enterprise, goods and services are distributed according to personal income. The more you earn, the more you can buy. Taxes are used in part for such programs as welfare and social security which help provide the poor with goods and services.
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