Economic Systems

WHAT TO PRODUCE? HOW MUCH? HOW TO PRODUCE? FOR WHOM TO PRODUCE?

BASIC ECONOMIC PROBLEMS

MIXED ECONOMY

A Mixed Economy with elements of traditional, command, and free market are present in varying degrees that is both private and public institutions exercise economic control.

Poverty and Unequal Distribution of Income Demographic Changes and Its Economic Implication Low Investment in Human Resource Development Weak Infrastructure Pursuing Food Security Slow Adoption of Modern Technology

BASIC ECONOMIC PROBLEMS CONFRONTING THE DEVELOPMENT OF THE PHILIPPINES IN THE 21ST CENTURY

TRADITIONAL ECONOMY

Decisions are based on traditions years and passed on and practices upheld over the from generation to generation. Methods are stagnant and therefore not progressive. Traditional societies exist in primitive and backward civilizations.

LAND LABOR CAPITAL ENTREPRENEURSHIP FOREIGN EXCHANGE

FACTORS OF PRODUCTION

ECONOMIC SYSTEMS

The economic system is the means through which society determines the answers to the basic economic problems mentioned.

LAND

These resources consist of free gifts of nature; a limited resource

COMMAND ECONOMY

This is the authoritative system wherein decision-making is centralized in the government or a planning committee, Decisions are imposed on the people who do not have a say in what goods are to be produced. The economy holds true in dictatorial, socialist, and communist nations.

MARKET ECONOMY

This is the most democratic form of economic system. Based on the workings of demand and supply, decisions are made on what goods and services to produce. People's preference are reflected in the prices they are willing to pay in the market and are therefore the basis of the producer's decisions on what goods to produce.

ENTREPRENEURSHIP

a science of converting ideas into business and is related to economic activity of a person who starts, manages, assumes the risk of a business enterprise.

Entrepreneur

came from French word which means "enterpriser"; organizer and coordinator of other factors of production: land, labor and capital. He uses his initiative, talent and resourcefulness to create economic goods.

CAPITAL

can represent the monetary or major physical assets used to purchase natural resources and producing commodities

LABOR

human resources; refers to all human efforts, be it mental or physical, that help to produce satisfying goods and services In return, he earns an income in forms of wages and salaries

Interest

income derived from capital