Econ. U2

  • Types of Economic Systems

    • Refer to the table of comparison

      Table of comparison

  • The mixed economy:

    • There are little or few pure economy in the world

    • Most are mixed

      • Even though HK is a typical market economy, it is a mixed economy with some prices like taxi fares controlled by the government

      • Even though North Korea is a typical market economy, some production decisions are still made by firms

  • Private Property Rights

    • Exclusive right to use the property

    • Exclusive right to receive income from the properrty

    • Exclusive right to transfer a property

  • Specialisation and Exchange

    • Both are enabled by Private Property Rights

    • Exchange (Market Exchange):

      • Private property rights make exchange possible

      • It enables price competition

      • People can buy and sell their goods,services and resources freely

    • Specialisation:

      • A way of organising production

      • Different people or economies concentrate on producing different goods

      • → higher efficiency as people or economies can concentrate on the jobs that they are best at

      • Because they don’t have to be self-suffiecient with exchange

      • →higher living standards