Allocation & Economic Systems
1. ALLOCATIONPREPARED BY SUE QUIRANTE FOR AP 9 & 10 RTPM-DSHS
2. USAGE NOTES • These are slides I use for my lectures on allocation and economic systems, a first quarter topic in Economics under the K to 12 curriculum in the Philippines. • All copyrighted materials were lifted from their respective sources under the spirit of fair use. As such, I am uploading these slides in the interest of helping out other public school teachers like me. This material should not be used for any commercial purpose. • Last modified: October 9, 2016
3. “ There isn’t enough to go around.” ~John
4. mekanismo ng pamamahagi ng pinagkukunang- yaman, produkto at serbisyo
5. Four Basic Economic Questions 1 What to produce? 2 How to produce it? 3 How much to produce? 4 Who gets what is produced?
6. Four Economic Systems
7. ECONOMIC SYSTEM consists of a matrix of: 1. social institutions (law, political institutions, religion, etc) 2. agents (individuals or actors) 3. organizations (corporations, unions, charitable org, not-for-profit firms, etc) 4. society (includes principles, beliefs, values)
8. ECONOMIC SYSTEM • function: coordinate the activities of agents in the processes of provisioning and allocation • most economies are a mixture that includes elements from all 3 types
9. Traditional Economy The Inuit tribes of Alaska
10. TRADITIONAL ECONOMY • evolved over time (traditions & custom form gradually) • rate of change is slow • rules of trade not apparent as economy but as moral system • medieval European rules against charging interest on loans—considered a sin in the Christian faith of the time
11. EXAMPLES • pre-modern Europe • pre-colonial tribes in the Americas, Australia, Africa, and Pacific islands
12. Command Economy
13. Command Economy• an overseeing government decides how resources are distributed amongst individuals within the system • trade and individual choice at the consumer and worker level is minimal or, in some cases, entirely non-existent • ideal: efficiency, equality
14. Command Economy• equality: by making sure to allot everyone an equal amount of wealth • in reality, the distributors of wealth at the government level often hoarded wealth for themselves
15. Market Economy • individuals meet in markets and decide what economic decisions they want to make for themselves • ideal : efficiency, freedom • emphasis on trade • exchange of goods and services
16. Mixed Economy • usually allow most people to decide how to obtain and spend capital, what work they would like to pursue, how much they would like to save, and what lifestyle they want to enjoy
17. Mixed Economy • at the same time, a command- based system from the government places restrictions on making choices and encourages market participants to move towards one decision over another
18. Synthesize What You Have Learned Who makes this decision? TRADITIONAL COMMAND MARKET MIXED What to produce? How to produce? How much to produce? Who gets what is produced? Dis/Advantage
