Types Of Economic System : Market Economy, And Distribution Of Goods And Services ( Nondo )

2926 Words Dec 5th, 2014 12 Pages
Economics itself is the production, consumption, and distribution of goods and services (Nondo). There are three types of economic system: market economy, mixed economy, and command/planned economy. Market economies are the best at deciding how much to produce, consume, and distribute. For example, capitalism is an example of a market economy. Under capitalism, prices and wages are determined by the forces of supply and demand. Command and control is where the planning authority makes all decisions regarding produce, consumption, and distribution. A mixed economy consists of market and command.
Microeconomics is the study of decisions that people and businesses make regarding allocation of resources and prices of goods and services (Nondo). Microeconomics focuses on supply and demand and other forces that determine the price levels seen in this economy. For example, microeconomics would look at how a specific company could maximize its production and capacity so it could lower prices and better compete in its industry. It focuses on the smaller portion of economics. It is concerned with the interaction between individual buyers and sellers and the factors that influence the choices made by the buyers and sellers (Nondo).
Microeconomics is the broad look at the overall economy, including employment, inflation and growth (Krugman). It concerns itself with the behavior of the economy as a whole, not just specific companies, but entire industries and economies (Investopedia).…

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