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QUESTION

MANAGEMENT & SCIENCE UNIVERSITY

INTRODUCTION TO ECONOMICS
DEC 0053

ASSIGNMENT 1

PREPARED FOR:
MATRIC ID: 012012051771

Comparison between the socialist, capitalist and the mixed economy | Capitalism| Socialism | Mixed Economy|
Characteristics| * Private ownership of resources * Freedom of enterprise and choice * Consumers; sovereignty * Competition * Minimum government intervention| * Public ownership of resources * Central Planning Authority * Price mechanism of less importance * Central control and ownership| * Public and private ownership of resources * Price mechanism and economic plans used to make economic decisions * Government helps to control income disparity * Government intervention in the economy * Large cooperation between the government, public and business|

COMPARISON
Capitalism :
Capitalism is an economic system in which the means of production are privately owned and operated for profit, usually in competitive markets. Income in a capitalist system takes at least two forms, profit on the one hand and wages on the other.

Socialist :
Socialist economics are the economic theories and practices of hypothetical and existing socialist economic systems. A socialist economy is based on public ownership or independent cooperative ownership of the means of production. A socialist economy is a system of production where goods and services are produced directly for use

Mixed :
Mixed economy is an economy that includes a variety of private and public enterprise, reflecting characteristics of both capitalism and socialism.Most mixed economies can be described as market economies with strong regulatory oversight, in addition to having a variety of government-sponsored

Economic system
An economic system is the structure that guides production, allocation of economic inputs, distribution of economic outputs, and consumption of goods and services in an economy. It is a set of institutions and their social relations. Alternatively, it is the set of principles by which problems of economics are addressed, such as the economic problem of scarcity through allocation of finite productive resources.

Question a)
Socialism is the economic system used by China.
i. The characteristic of economic system used by China is

* Public ownership of resources
* Central Planning Authority
* Price mechanism of less importance
* Central control and ownership
* Social ownership of means of production
* Existence of public sector
* Decisive role of Economic Planning
* Production guided by Social Benefits
* Abolition of exploitation of labor

ii. Advantages and disadvantages for three types of economic system

Capitalism

Advantages
* Provides Choice to customers
* Provides valuable goods and services
* Capitalism actively rewards positive traits like hard work * Similarly, it punishes negative traits such as laziness and theft * Narrows the gap between common person and wealthy * Provides opportunity to realize dreams and desires * Capitalist societies usually do not have large black markets * Build on democracy

* Social Goods

Disadvantages
* Downfall of work ethics
* Free Market + Self Interest
* Accumulation of wealth
* Encourages inequality in a society
* Business lobbying with government
* Monopolistic tendency
* Human resource exploitation
* Results in great disparities between income of people owning the capital resources and others

Socialism

Advantages
* Better salaries
* Stable Environment
* Eliminates poverty
* Better Products
* Fulfills survival need
* Opportunity for citizens to explore non-economically-productive pursuits

Disadvantages
* Distorted price signals
*...
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