Assignment Microeconomics

Every society must be organising and coordinate its economic by deciding on

There are Four main types of economic systems

1. Traditional economic systems :

2. Free market economic systems
3. Command economic systems
4. Mixed economic systems

Each Economic systems have definitions and traits

• Traditional economic systems :
• Definition
Traditional economic systems focuses exclusively on goods and services that are
directly related to it’s beliefs , costumes and Tradition.
It’s relies heavily on individuals and doesn’t usually show a significant degree of
specialisation and division of labour.
• Traits of traditional economic systems
1. Traditional economic are often based on one or a few of agricultural
hunting, fishing and gathering.
2. Bartering and trade is often used in place of money
3. There is rarely a surplus produced
4. They are geographically and locally based
5. Most often Traditional economic collective for human beings behavior
• Free market economic systems :
• Definition
A market is and arrangement that enables buyers and sellers to get information and
to do business with each other
Capitalism is an economic systems in which all means of production are owned and
controlled by private individuals and all the decisions are made on the basis of profit
.
Traits of free market economic systems
1. In a market economic almost everything is owned by individuals and
Private business
2. The decisions about the allocation of those resources are made by
individuals with out government intervention
3. Most economic decisions are made buyers and sellers, but not the
government
4. A market economy has freedom of choice and free enterprises
5. The one of the most important traits of a market economy also called
Free enterprise economy

• Mixed economic systems :

• Definition
Has features of both a command and free market system a mixed economic is partly
controlled by the government and partly based on the forces supplyi and demand
Most of the main economic in the world are now mixed economic which operate
under a mix of socialism and Capitalism
 Moat mixed economic use fiscally and monetary policies to stimulate growth during
economic slowdown.

Traits of mixed economic system :

1. It protects private property
2. It allows the free market and the law of supply and demand to determine
prices
3. It is driven by the motivation of the self interest of individuals

• Command economic systems :

• Definition
Command economic systems mechanism a method of determining what, how, when
and where good and services are produced and who consumers
Them.

Traits of Command economic systems :

1. A command economic where a central government makes all economic
decisions
2. Either the government or a collective owns the land and the means of
production
3. It’s doesn’t rely on the law of supply and demand that operates in a market
economy
4. The command economy also ignores the customs that guide a traditional
economy