Economic system. Main questions of economics Types of economic systems questions
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Lecture:
Main economic issues
Economic science, guided by the principle of rational use of limited resources to satisfy the unlimited needs of people, seeks answers to the questions: what, how and for whom to produce?
What to produce? This means deciding what, in what quantity and of what quality economic goods (goods and services) need to be created.
How to produce? This means deciding what resources and technologies will be used in the production of certain economic goods.
For whom to produce? This means determining for which categories of people (market segment) the goods produced will be intended, for example, toys for children, cosmetics for women.
Economic system is a set of principles and rules of economic relations that arise in the process of production, distribution, exchange and consumption of goods.
Scientists distinguish traditional, planned (command), market and mixed economic systems. Let's consider their characteristic features.
Traditional economic system
The oldest type is the traditional economic system. It is characteristic of primitive society, but also exists in modern countries of South America, Asia and Africa, where resources are very limited.
Signs:
- resolving issues of what, how and for whom to produce is based on traditions (continuity);
- the basis of the economy is agriculture;
- communal form of ownership;
- universal manual labor and primitive production technologies that hinder the growth of labor productivity;
- subsistence farming, production aimed at satisfying one’s own needs and not for sale;
- low trade turnover, correspondingly low level of commodity-money relations;
- closed society, the existence of caste or class divisions that do not allow people to move from one social group to another, as a result of which socio-economic progress is hampered.
The traditional economic system has its advantages and disadvantages. The advantages are continuity, ease of organization of production, and minor environmental pollution. The disadvantages are low incomes, shortages of consumer goods, and limited economic growth.
Planned economic system
A planned (command) economic system is one of the signs of a totalitarian political regime. This type dominated during the Soviet era, but also functions in modern states, for example, North Korea and Cuba.
Signs:
- the decision of the main economic issues belongs to a centralized state body, which carries out directive planning of production;
- the basis of the economy is agriculture and foreign trade;
- the means of production are owned by the state, and only property intended for running a household can be privately owned;
- the emergence of a social division of labor;
- administrative regulation of prices;
- market monopolization.
Market economic system
A market economy presupposes freedom of entrepreneurial activity, which is guaranteed by the state. The basis of the relationship between producers and consumers is individual interest and personal benefit.
Signs:
- the decision on what, how and for whom to produce belongs to the owner, producer, consumer;
- the basis of the economy is the service sector;
- a variety of forms of ownership is recognized, but private ownership predominates;
- deepening the social division of labor;
- trade relations are developing widely;
- pricing is free and regulated by market laws;
- competition;
- Scientific and technological progress achievements are being widely introduced into production.
The main advantage of a market economy is competition, which is necessary for producers to strive to create quality products and for consumers to have a wide choice of a particular product or service (assortment). Another advantage is the interest of producers in using resources efficiently and meeting the maximum needs of people at minimum costs. This system also has disadvantages. This is income inequality, a significant social gap between the poor and the rich, unemployment, and periodic economic crises. The problem of negative external (side) effects is acute. For example, the operation of a pulp and paper mill causes water pollution (release of waste into water); Increased use of cars by people leads to air pollution. The state is forced to intervene in solving such problems, eliminating market imperfections.
Mixed economic system
This type of economic system combines the features of command and market systems with the predominance of the latter. Therefore, one of the important features of a mixed economy is multi-sector, when the role of both the state and private individuals is significant in production. But this system may also contain features of a traditional economy. For example, perfume production in France is traditional. The role of the state in a mixed economy is great and consists in:
- preventing a monopoly on the production of economic goods (with the exception of strategically important goods, for example, military equipment and weapons, space equipment);
- preventing shortages of goods and services;
- price stabilization;
- ensuring employment of the able-bodied population and providing assistance to disabled citizens (for example, disabled people, pensioners);
- production of public goods (for example, health care and education);
- protection from unscrupulous market participants;
- in the fight against negative externalities of production.
At all historical stages of human development, society faces the same question: what, for whom and in what quantities to produce, taking into account limited resources. The economic system and types of economic systems are precisely designed to solve this problem. Moreover, each of these systems does this in its own way, each of them has its own advantages and disadvantages.
Concept of economic system
An economic system is a system of all economic processes and production relations that has developed in a particular society. This concept refers to an algorithm, a way of organizing the production life of society, which presupposes the presence of stable connections between producers on the one hand and consumers on the other.
The following processes are the main ones in any economic system:
Production in any of the existing economic systems is carried out on the basis of appropriate resources. Some elements still differ in different systems. We are talking about the nature of management mechanisms, motivation of producers, etc.
Economic system and types of economic systems
An important point in the analysis of any phenomenon or concept is its typology.
Characteristics of types of economic systems, in general, comes down to the analysis of five main parameters for comparison. This:
- technical and economic parameters;
- the ratio of the share of state planning and market regulation of the system;
- property relations;
- social parameters (real income, amount of free time, labor protection, etc.);
- mechanisms of system functioning.
Based on this, modern economists distinguish four main types of economic systems:
- Traditional
- Command-planned
- Market (capitalism)
- Mixed
Let's take a closer look at how all these types differ from each other.
Traditional economic system
This economic system is characterized by gathering, hunting and low-productivity farming based on extensive methods, manual labor and primitive technologies. Trade is poorly developed or not developed at all.
Perhaps the only advantage of such an economic system is the weak (almost zero) and minimal anthropogenic load on nature.
Command-plan economic system
A planned (or centralized) economy is a historical type of economic management. Nowadays it is not found anywhere in its pure form. Previously, it was typical for the Soviet Union, as well as some countries in Europe and Asia.
Today they talk more often about the shortcomings of this economic system, among which it is worth mentioning:
- lack of freedom for producers (commands to produce “what and in what quantities” were sent from above);
- dissatisfaction with a large number of economic needs of consumers;
- chronic shortages of some goods;
- emergence (as a natural reaction to the previous point);
- the inability to quickly and effectively implement the latest achievements of scientific and technological progress (due to which the planned economy always remains one step behind other competitors in the global market).
However, this economic system also had its advantages. One of them was the possibility of ensuring social stability for everyone.
Market economic system
The market is a complex and multifaceted economic system that is typical for most countries of the modern world. Also known by another name: capitalism. The fundamental principles of this system are the principles of individualism, free enterprise and healthy market competition based on the relationship between supply and demand. Private property dominates here, and the main incentive for production activity is the thirst for profit.
However, such an economy is far from ideal. The market type of economic system also has its disadvantages:
- uneven distribution of income;
- social inequality and social vulnerability of certain categories of citizens;
- instability of the system, which manifests itself in the form of periodic acute crises in the economy;
- predatory, barbaric use of natural resources;
- weak funding for education, science and other non-profit programs.
In addition, there is also a fourth type - a mixed type of economic system, in which both the state and the private sector have equal weight. In such systems, the functions of the state in the country’s economy are reduced to supporting important (but unprofitable) enterprises, financing science and culture, controlling unemployment, etc.
Economic system and systems: examples of countries
It remains to consider examples that are characterized by one or another economic system. For this purpose, a special table is presented below. The types of economic systems are presented in it taking into account the geography of their distribution. It is worth noting that this table is very subjective, since for many modern states it can be difficult to unambiguously assess which system they belong to.
What type of economic system is in Russia? In particular, Moscow State University professor A. Buzgalin described the modern Russian economy as a “mutation of late capitalism.” In general, today the country’s economic system is considered to be transitional, with an actively developing market.
Finally
Each economic system responds differently to the three “what, how and for whom to produce?” Modern economists distinguish four main types: traditional, command-planned, market, and mixed systems.
Speaking about Russia, we can say that in this state a specific type of economic system has not yet been established. The country is in a transitional stage between a command economy and a modern market economy.
The basic problem of economics can also be presented as a problem of choice. Indeed, if each factor used to satisfy various needs is limited, then there is always the problem of alternative use and search for the best combination of factors of production, that is, the problem of choice. A reflection of this problem is the statement three main questions economy.
Three main questions of economics:
What? – problem of targeting. – Which of the possible goods and services should be produced in a given economic space and at a given time?
How? – production problem.– With what combination of production resources, using what technology, should the selected goods and services be produced?
For whom? – distribution problem.– Who will buy the selected goods and pay for them, benefiting from them? How should society's gross income from the production of these goods and services be distributed?
The fourth question, which also inevitably faces every society, is the question: How? How to get rid of waste generated in the process of life, how to maintain the ecological balance in nature without reducing the level of consumption. This recycling problem.
5. Production possibilities in the economic system and the problem of choice.
The production capabilities of the economic system are limited by the scarcity of the resources used. Moreover, the limitation of all economic resources remains and even increases as society develops. This is due not only to the depletion of irreplaceable natural resources, but also to the fact that consumption constantly gives impetus to the development of production, that is, new goods and services are created, their quality characteristics change, which causes an increase in the need for consumer and investment goods. And each time society is forced to decide which of these goods to produce with available resources and on what scale.
The problem of choice in any economic system (be it a family, a company, a state) can be illustrated using economic model “Production Possibility Frontier”. And also, this model allows you to clearly demonstrate such fundamental economic concepts as limited resources, opportunity costs.
To build the model, we will plot the number of consumer goods (X) on the abscissa axis, and the number of means of production (Y) on the ordinate axis (see figure).
Means of production (Y)
Consumables (X)
O X B X C
The ABCD curve, called production possibilities frontier, characterizes the maximum possible volumes of production of means of production and consumer goods with full use of all available resources. Each point on this curve represents a certain combination of goods of these two types (for example, point B represents a combination of X B units of consumer goods and Y B units of capital goods.
The production possibilities frontier graph illustrates the fact that an economy that is fully utilizing productive resources cannot increase the production of any good without sacrificing another good. The functioning of an economy at the frontier of its production possibilities indicates its efficiency.
Based on this, the choice of the combination corresponding to point F is regarded as unsuccessful for a given society, since it does not allow it to effectively use production resources. Having chosen such a point, we would resign ourselves either to the presence of unused resources (for example, unemployment) or to the low efficiency of their use (for example, large losses, including working time). Production based on the choice of point E is generally unfeasible, since this point lies beyond the production capabilities of a given economic system.
Let's compare points B and C. By choosing point B, we will prefer to produce fewer consumer goods (X B) and more means of production (Y B) than by choosing point C (X C, Y C). More precisely, when moving from point B to point C, we will additionally receive Δ X = OX C – OX B units of consumer goods, sacrificing for this ΔY = OY B – OY C units of means of production. The amount of one good that must be sacrificed to increase the production of another good by one unit is called opportunity costs or costs of lost opportunities.
The ABCD curve is convex. This is due to the fact that one resource can be used more productively in the production of consumer goods, while others can be used as means of production.
If new technology, new technological processes are introduced simultaneously and evenly in all industries, then the production possibilities frontier AD will shift to the position of the dotted line A 1 D 1, the possibilities of producing both means of production and consumer goods with the same resources will increase approximately equally ( see fig.).
If innovations are carried out primarily in industries producing capital goods, the increase in the area of production possibilities will be skewed to the right (see figure).
Economic system
Economic system(English) economic system) - the totality of all economic processes occurring in society on the basis of the property relations and economic mechanism that have developed in it. In any economic system, production plays a primary role in conjunction with distribution, exchange, and consumption. In all economic systems, production requires economic resources, and the results of economic activity are distributed, exchanged and consumed. At the same time, economic systems also have elements that distinguish them from each other:
- socio-economic relations;
- organizational and legal forms of economic activity;
- economic mechanism;
- system of incentives and motivations for participants;
- economic relations between enterprises and organizations.
The main types of economic systems are listed below.
Economic system in different scientific schools
The concept of an economic system (its content, elements and structure) depends on the economic school. In the neoclassical paradigm, the description of the economic system is revealed through micro- and macroeconomic concepts. The subject of neoclassicalism is defined as the study of the behavior of people maximizing their utility in an environment of limited resources with unlimited needs. The main elements are: firms, households, state.
Economic systems are also studied from the point of view of other theoretical schools directly related to economic theory. From the point of view of researchers of modern post-industrial society, post-industrial economy (neo-economics, “information society” or “knowledge society”) is born as a special technological structure that significantly modifies economic and social systems as a whole. In the “development economics” paradigm, a special group of “third world” countries is distinguished, where there are a number of important patterns: institutional structure, features of macroeconomic dynamics, and a special model. Thus, development economics considers a class of special economic systems. In contrast to the dominant concepts of neoclassicism and neo-institutionalism, the historical school emphasizes the historical differences between national economic systems.
Parameters for comparison of economic systems
Technical, economic and post-economic parameters
Economic systems are studied from the point of view of technological structures. In terms of structure, these are: pre-industrial economic systems, industrial and post-industrial economic systems. An important parameter for post-industrial systems is the degree of development of creative activity and its role in the economy. To measure it, measurable parameters of the level of education are usually used, for example, the proportion of people with higher education, the structure of professional employment, etc. The most important characteristic is the assessment in the economic system of measures to solve environmental problems. Demographic parameters make it possible to answer questions related to the approach of the economic system to a post-industrial society, and the following parameters are directly related to these parameters: life expectancy, infant mortality, morbidity, and other parameters of the health of the nation. The share of post-industrial technologies is usually calculated by the share of people employed in production of various industries in the total GDP.
Relationship between plan and market (allocation of resources)
These parameters are especially relevant for countries with economies in transition. Characteristics are given to the mechanisms of state economic planning, the development of commodity-money relations, measures for the development of the natural economy, and measures for the development of the shadow economy. Characteristics of market development: measure of development of market institutions, measure of market self-organization (competition), market saturation (absence of deficit), market structure. Regulation development measures: antimonopoly regulation; measure of development of state regulation (selective regulation, countercyclical regulation, programming); a measure of development of regulation on the part of public associations. A more detailed study of the role of the state in the economy is carried out in the theory of public choice, which considers the process of government decision-making, the system of social contract (constitutional economics), etc. .
Property Relationship Comparison Options
When analyzing economic systems, a characteristic is given of the ratio of shares of state, cooperative and private enterprises. However, such a characteristic is formal; for a deeper characterization of the economic system, qualitative and quantitative characteristics are used to describe the essence of the forms and methods of controlling property and its appropriation. For example, for countries with economies in transition, such a characteristic can be given by answering the following questions:
- a measure of the concentration of power in the hands of the bureaucratic party-state apparatus and the isolation of the state from society (workers do not participate in the appropriation of public wealth);
- the degree of centralization/decentralization of state property (“transfer” of some management functions to the enterprise level) and, for example, the nationalization of cooperative property;
- a measure of the decomposition of the state-bureaucratic pyramid of economic power and the formation of “closed departmental systems”, strengthening of power locally and in the regions.
Over time, an economic system can democratize as more of the power of property management and appropriation is given to businesses and individuals.
An important characteristic of property relations is the form of ownership, what is the share of enterprises: completely state-owned; joint-stock enterprises, the controlling stake of which is in the hands of the state; cooperatives and collective enterprises; joint-stock enterprises, the controlling stake of which is in the hands of employees; joint-stock enterprises, where a controlling stake belongs to individuals and private corporations; private personal enterprises using hired labor; based on the personal labor of owners; foreign-owned enterprises; property of public organizations; various types of joint ventures.
Comparative analysis of social parameters
Level and dynamics of real incomes. The “price” of the real income received (length of the working week, family working time fund, labor intensity). Quality of consumption (market saturation, time spent in the sphere of consumption). Share of free time, directions of its use. Quality and content of work. Development of the socio-cultural sphere, accessibility of its services. Development of the scientific and educational sphere and its accessibility.
Comparative study of the mechanism of functioning of economic systems
Modern market economic system
The market is a complex economic system of social relationships in the sphere of economic reproduction. It is determined by several principles that determine its essence and distinguish it from other economic systems. These principles are based on human freedom, his entrepreneurial talents and the fair treatment of them by the state. Indeed, these principles are few in number - they can be counted on the fingers of one hand, but their importance for the very concept of a market economy cannot be overestimated. Moreover, these foundations, namely: individual freedom and fair competition, are very closely related to the concept of the rule of law. Guarantees of freedom and fair competition can only be given in the conditions of civil society and the rule of law. But the very essence of the rights acquired by a person under the rule of law is the right to freedom of consumption: every citizen has the right to arrange his life as he sees it, within the framework of his financial capabilities. A person needs his property rights to be inviolable, and in this protection of his rights he himself plays the main role, and the state takes on the role of protecting other citizens from illegal attacks on the property of other citizens. This balance of power keeps a person within the law, since ideally the state is on his side. The law that begins to be respected, whatever it may be, becomes fair at least for those who respect it. But, while protecting the rights of citizens, the state should not cross the line of either totalitarianism or chaos. In the first case, the initiative of citizens will be restrained or manifested in a distorted form, and in the second, the state and its laws can be swept away by violence. However, the “distance” between totalitarianism and chaos is quite large, and the state in any case must play “its” role. This role is to effectively regulate the economy. Regulation should be understood as a very wide range of measures, and the more effective its use, the higher the trust in the state.
Distinctive features:
- variety of forms of ownership, among which private property in various forms still occupies the leading place;
- the deployment of a scientific and technological revolution, which accelerated the creation of a powerful industrial and social infrastructure;
- limited government intervention in the economy, but the role of the government in the social sphere is still great;
- changes in the structure of production and consumption (increasing role of services);
- increase in the level of education (post-school);
- new attitude to work (creative);
- increasing attention to the environment (limiting reckless use of natural resources);
- humanization of the economy (“human potential”);
- informatization of society (increasing the number of knowledge producers);
- renaissance of small business (rapid renewal and high differentiation of products);
- globalization of economic activity (the world has become a single market).
Traditional economic system
In economically underdeveloped countries, there is a traditional economic system. This type of economic system is based on backward technology, widespread manual labor, and a multi-structured economy.
A multi-structured economy means the existence of various forms of economic management in a given economic system. Natural community forms based on community farming and natural forms of distribution of the created product are preserved in a number of countries. Small-scale production is of great importance. It is based on private ownership of productive resources and the personal labor of their owner. In countries with a traditional system, small-scale production is represented by numerous peasant and craft farms that dominate the economy.
In conditions of relatively poorly developed national entrepreneurship, foreign capital often plays a huge role in the economy of the countries under consideration.
The life of society is dominated by centuries-old traditions and customs, religious cultural values, caste and class divisions, holding back socio-economic progress.
Solving key economic problems has specific features within different structures. The traditional system is characterized by such a feature - the active role of the state. By redistributing a significant part of the national income through the budget, the state directs funds to develop infrastructure and provide social support to the poorest segments of the population. A traditional economy is based on traditions passed down from generation to generation. These traditions determine what goods and services can be produced, for whom and how. The list of goods, production technology and distribution are based on the customs of the country. The economic roles of members of society are determined by heredity and caste. This type of economy persists today in a number of so-called underdeveloped countries, into which technological progress penetrates with great difficulty, because it, as a rule, undermines the customs and traditions established in these systems.
Advantages of Traditional Economics
- stability;
- predictability;
- good quality and a large number of benefits.
Disadvantages of Traditional Economics
- vulnerability to external influences;
- inability to self-improvement, to progress.
Distinctive features:
- extremely primitive technologies;
- predominance of manual labor;
- all key economic problems are solved in accordance with age-old customs;
- the organization and management of economic life is carried out on the basis of council decisions.
Traditional economic system: Burkina Faso, Burundi, Bangladesh, Afghanistan, Benin. These are the least developed countries in the world. The economy is focused on agriculture. In most countries, fragmentation of the population in the form of national (folk) groups prevails. GNP per capita does not exceed $400. The economy of the countries is represented mainly by agriculture, rarely by the mining industry. Everything that is produced and mined is not able to feed and provide for the population of these countries. In contrast to these states are countries with higher incomes, but also focused on agriculture - Azerbaijan, Cote d'Ivoire, Pakistan.
Administrative command system (planned)
This system previously dominated in the USSR, countries of Eastern Europe, and a number of Asian states.
The characteristic features of the ACS are public (and in reality, state) ownership of almost all economic resources, monopolization and bureaucratization of the economy in specific forms, centralized economic planning as the basis of the economic mechanism.
The economic mechanism of the AKS has a number of features. It assumes, firstly, direct management of all enterprises from a single center - the highest echelons of state power, which negates the independence of economic entities. Secondly, the state completely controls the production and distribution of products, as a result of which free market relationships between individual farms are excluded. Thirdly, the state apparatus manages economic activities using mainly administrative and administrative (command) methods, which undermines material interest in the results of labor.
Complete nationalization of the economy causes monopolization of production and sales of products on an unprecedented scale. Giant monopolies, established in all areas of the national economy and supported by ministries and departments, in the absence of competition, do not care about the introduction of new equipment and technology. A deficit economy generated by a monopoly is characterized by the absence of normal material and human reserves in case of an imbalance in the economy.
In countries with ACN, solving general economic problems had its own specific features. In accordance with the prevailing ideological guidelines, the task of determining the volume and structure of production was considered too serious and responsible to transfer its decision to the direct producers themselves - industrial enterprises, state farms and collective farms.
The centralized distribution of material goods, labor and financial resources was carried out without the participation of direct producers and consumers, in accordance with pre-selected public goals and criteria, based on centralized planning. A significant part of the resources, in accordance with the prevailing ideological guidelines, was directed to the development of the military-industrial complex.
The distribution of created products among production participants was strictly regulated by central authorities through a universally applied tariff system, as well as centrally approved standards for funds in the wage fund. This led to the predominance of an equal approach to wages
Main features:
- state ownership of almost all economic resources;
- strong monopolization and bureaucratization of the economy;
- centralized, directive economic planning as the basis of the economic mechanism.
Main features of the economic mechanism:
- direct management of all enterprises from a single center;
- the state fully controls the production and distribution of products;
- The state apparatus manages economic activities using predominantly administrative-command methods.
This type of economic system is typical for: Cuba, Vietnam, North Korea. A centralized economy with an overwhelming share of the public sector, it is largely dependent on agriculture and foreign trade. GNP per capita is slightly more than $1,000.
Mixed system
A mixed economy is an economic system where both the state and the private sector play an important role in the production, distribution, exchange and consumption of all resources and material goods in the country. At the same time, the regulatory role of the market is complemented by the mechanism of state regulation, and private property coexists with public-state property. The mixed economy arose in the interwar period and to this day represents the most effective form of management. There are five main problems solved by a mixed economy:
- providing employment;
- full use of production capacity;
- price stabilization;
- parallel growth of wages and labor productivity;
- balance of payments equilibrium.
Distinctive features:
- priority of market organization of the economy;
- multi-sectoral economy;
- state MANAGEMENT entrepreneurship is combined with private entrepreneurship with its full support;
- orientation of financial, credit and tax policies towards economic growth and social stability;
- social protection of the population.
This type of economic system is typical for Russia, China, Sweden, France, Japan, Great Britain, and the USA.
Literature
- Kolganov A.I., Buzgalin A.V. Economic comparative studies: Comparative analysis of economic systems: Textbook. - M.: INFRA-M, 2009. - ISBN 5-16-002023-3
- Nureyev R.M. Essays on the history of institutionalism. - Rostov n/a: "Assistance - XXI century"; Humanitarian Perspectives, 2010. - ISBN 978-5-91423-018-7
- Vidyapin V.I., Zhuravleva G.P., Petrakov N.Ya. and etc. Economic systems: cybernetic nature of development, market management methods, coordination of economic activities of corporations / Translated from the general editor - N.Ya. Petrakova; Vidyapina V.I.; Zhuravleva G.P. - M.: INFRA-M, 2008. - ISBN 978-5-16-003402-7
- Dynkin A.A., Korolev I.S., Khesin E.S. and etc. World economy: forecast until 2020 / Edited by A.A. Dynkina, I.S. Koroleva, G.I. Machavariani. - M.: Master, 2008. - ISBN 978-5-9776-0013-2
Notes
Links
- Website of Inozemtsev V.L. Modern post-industrial society: nature, contradictions.
- Erokhina E. A. Theory of economic development, systemic-synergetic approach.
- Liiv E. H. Infodynamics generalized entropy and negentropy 1997
In this lesson we will find out what the main questions are in economics, why it exists, and how it tries to answer these main questions. We will also talk about cost efficiency and economic choice. We will try to show how economics enters the life of every person.
Topic: Economics
Lesson: Basic Economic Issues
In the last lesson, we talked about the fact that resources are very limited, and economics, in fact, is designed to solve the question of how to use these resources with maximum benefit for humanity. All participants in economic processes are in one way or another in a state of choice: they choose which resource to use now and which to use later, which goods to produce, etc. Accordingly, in the economy there arise three main questions to which she must respond: “what to produce?”, “how to produce?” And “For whom to produce?”. The answer to these three questions is the answer to the main task of economic processes. Let's talk about each of them separately.
Rice. 1. Basic issues of economics ()
So the first question is “What goods to produce?” It is clear that a person is a creature who, living in a social environment, largely serves himself. Primitive people, of course, served themselves independently. Thus, the primitive hunter made the items he needed for hunting: a spear, a bow and other things he needed. And in our time, each of us can do some things for ourselves on our own, or we can get these things in another way. They can give you something, something can be passed on to you by inheritance, and you can buy something on the market. Thus, you create your life the way you want it to be. You can become an absolutely satisfied person, all your needs and desires can be realized, but society, alas, cannot live like this due to the limited resources of our resources.
That is why all producers (they can be the state, private firms, even individuals) are in a situation of constant choice of which product they need to produce. It depends on what exactly will be in demand in the near future. Over time, the demand for certain goods changes. A century or two ago, some things were absolutely necessary, but now the need for them has disappeared; among other things, they have become archaic. An example of such a thing would be bast shoes.
Being in a situation of choice, manufacturers strive to obtain not only immediate benefits, but also to lay the foundations for their future production. They strive to increase their profits in the future by anticipating the needs of society that may arise.
Of course, it is very profitable for all manufacturers to produce those services or goods that cannot be refused. A person cannot refuse food or clothing. But the essence of the economy is the presence of competition, the confrontation between different producers, so that the consumer has the opportunity to choose whether to buy cheaper or buy more expensive. By the way, it should be explained why things are generally cheaper or more expensive. This happens because the manufacturer always decides how to produce goods.
Rice. 3. The essence of economics is competition between producers ()
So, we come to the second question - “how to produce goods and services?”. There are always a variety of ways and possibilities to produce the same product or service. The way it is manufactured and the decisions that manufacturers make during the production of the product depend on what the final product will be. One way or another, any manufacturer makes sure that its solutions are the most effective. And under economic efficiency understand the product of a given volume of finished product with the least expenditure of limited resources. Having understood this relationship, we can understand why a particular product has such a price. The manufacturer always strives to reduce the cost of its production, but at the same time does not want to reduce its profits. This is the basis of any production; the economics of production exists on this balance.
However, there is also a third question that we identified today - “for whom to produce goods and services?”. It is clear that we all have different desires, and we all have different opportunities. When producing any product, the manufacturer strives to please the interests of the broad masses of the population. But it is simply impossible to do this with the help of any one service or product. That is why each manufacturer strives to either highly specialize or produce a wide range of goods and services for different social strata. It does not matter whether it is a physical product or a service that does not have physical expression, because it also has a cost and brings profit to the manufacturer.
So, to obtain the correct answers to the main questions of economics, it is necessary to know the capabilities of the economic system, the state of the market, and the factors shaping supply and demand.
As we see, three main economic issues put human society in a state of choice. One way or another, we have to choose where to produce, how to produce, what to produce, for whom to produce. This question is painful every time, because for some time the production of some things and services may be profitable, but then it ceases to be so. It should be understood that almost every day manufacturers are in limbo, because it is very difficult to determine the exact priorities of a person. There is a possibility that our outlook on life will change and the need for some item or service will disappear. You can give a lot of examples in the history of mankind when some important and interesting things that a person used eventually came to nothing. Such is life, such is the economy.
Think about why the quality of manufactured goods is different. The same thing on the market can have completely different prices depending on its quality. Let's take pens as an example. This is an ordinary everyday item that is familiar to you. But even that can cost completely differently. You can buy a simple and inexpensive ballpoint pen that you will use every day, or you can buy a very expensive gift pen for special occasions. But, nevertheless, it is still the same pen, a writing instrument.
Rice. 4. Simple or gift - a pen is just a writing instrument ()
So where does this price difference come from? It's about human interests and desires. The manufacturer initially focuses on a specific buyer. People's tastes are varied: some have a greater craving for luxury and a desire to surround themselves with expensive items, while for other people it is enough to have simple and multifunctional items at hand. From the point of view of the manufacturer, it is a person with a craving for luxury, unusual things, who is a buyer who is willing to pay a large amount for the same product. The most expensive items and services are aimed at it. For example, a watch can be simple in design, or it can become a complex luxury item that has a lot of additional functions and indicates the high social status of its owner. The need for them is very conditional, but the owner of such a watch is proud that he has it.
Rice. 5. Expensive watches are more of a luxury than a necessity, but the owner is proud of owning them ()
We all surround ourselves with things and objects that we need. This is how we build our own lives. This is how economics enters the life of every person.
Bibliography
1. Kravchenko A.I. Social science 8. - M.: Russian word.
2. Nikitin A.F. Social studies 8. - M.: Bustard.
3. Bogolyubov L.N., Gorodetskaya N.I., Ivanova L.F. / Ed. Bogolyubova L.N., Ivanova L.F. Social science 8. - M.: Education.
3. Website for professional traders ().
Homework
1. Explain what economic efficiency is.
2. Describe three major economic issues.
3. * Imagine that you have been inherited the right to own a network of confectionery factories. Answer the main economic questions: what exactly will you produce, how and for whom.
