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ECONOMIC SYSTEMS - Coggle Diagram
ECONOMIC SYSTEMS
Tradition based economic systems (basic economic issues)
economic systems based on
customs
laws
beliefs
in the cities they formed guilds
regulated and established rules of production
tradition-based on societies are doing changes
preserving the community was sow important
would lead more economic growth
production is restricted to
self-consumption
subsistence
households follow these principles
they consume only what they produce
they generate little surplus
their production is limited to achieving self-sufficiency
MARKET
procedures that govern commercial exchange
different types of markets
feudal system in medieval times
supply and demand
needs of the privileged
the clergy
the nobility
Authority: the central planning system
how it is produced?
based on state's goals
for whom is it produced?
determined by need
what is produced?
determined by the stage
The mixed economiy system
how it is produced?
by private companies at the lowest cost and by the state based on its goals
for whom is it produced?
dtermined by the market but the state guarantees equal opportunities
what is produced?
determined by the free market and the state
Pictures
Capitalisim and the free market system
price
supply
the amount of a product
offer for sale at a specified price
the sellers
demand
the buyers
the amount of a product
that the consumers purchase at specified price
prices decrease
supply is high but demand low
this is called SURPLUS
the surplus reduces prices
prices increase
demand is high but the supply low
this is called SHORTAGE
companies incrise the price
products are willing to pay more
capitalisim
investment of capital
economic activity
maximise potential profits
free market
the decision of regarding
determined by the economic agents
private ownership
means of production
includes physical and financial capital
