GEO 702 Lecture Notes - Lecture 3: Environmental Economics, Tesco, Activated Carbon
Overview of Economics
• Getting Organized: Market, Command, and Mixed Economies
In terms of economics we have main types of economics: Market, Command, and Mixed
Economies
Not all these economies are organized in the same way but these are the best
categorization that we can do
The three major way that economics can be organized or categorized are Market,
Command, and Mixed Economies
• Not all economies are organized in the same way.
• The three major ways they can be organized are as a market economy, a command
economy, or a mixed economy.
• Market Economy
• In a market economy, consumers and businesses decide what they want to produce and
purchase in the marketplace.
Market economy: in a market economy, the consumers and businesses are the boss, they
decide what to produce and buy (sell and buy)
• In a market economy consumers and businesses decide what to produce and what to
purchase ex. So if consumers and producers are the people who make the decisions: Let's
say you are living in Toronto and you want internet. What are your choices: There's Rogers
and Bell - there are other sister companies but they're all under the umbrella of these two
main companies - there are no other choices - is this a market economy? No it is not
because you don't have enough choices
• I arket eooy osuers they ake these deisios y otig ith their dollars.
• Producers decide what to produce given the demand they see in the marketplace in terms
of their sales and the prices they get for their goods and services. It's very customer based
• In a pure market economy, the government plays a very limited role in what is
produced. So the government isn't strong compared to planned economy or mixed
economy
• A pure market economy the govt is very weak and people/public make the decision - the
govt doesn't direct what should be bought and sold
• The government does not direct, and may even lack the power to direct, the private sector
to produce certain goods and services.
• Command Economy
Command/Planned Economy is when the govt is big and strong, it impacts decisions and
makes decisions. The govt decides what is produced and in what amounts. Some countries
have planned/command economy - comes from the communism term- the govt decides
what is good for you (what to drive, wear etc)
• In a command economy, also known as a planned economy, the government largely
determines what is produced and in what amounts.
• It directs producers to make and deliver goods and services in specified amounts.
• In practice, command economies are associated with socialism and communism, two
closely related forms of government.
find more resources at oneclass.com
find more resources at oneclass.com
They are very closely related to the govt ruling the society s
These countries are forced by the govts so planned economy is characterized by socialism
and communism - the govt commands the society what to produce, in what amounts, and
what needs to be done
• Socialism and communism are characterized by collective ownership of the means of
production and central planning functions that try to produce what people want and
need, in the quantities and at the time required.
Socialism and communism are characterized by collected ownership. Everyone has
ownership of that for ex island, community - everyone shares the ownership of this
community that is, they have the means of production and central planning functions and
they try to produce what people want and need and they are produced by the force of the
govt
Even the quantities and the time required is dictated by those in the govt/in power in that
country
• The uderlyig philosophy of soialis is fro eah aordig to his abilities, to each
aordig to his eeds. This is basically what is in planned economy
• In command economies, the people (in the form of the state the state or govt) own the
means of production.
• The state, which is seen to embody the will of the people, decides what will be produced
according to a plan based upon what the state calculates to be people's need and desire
for various goods and services.
They produce based on the plan ex: this year we need to xyz and so we need to produce
and sell goods and services according to this plan
• The state also plays an important role in determining how goods and services are
distributed, that is, in deciding who gets how much of what.
• Since the fall of the Soviet Union in 1991, two of major planned economies are those of
North Korea and the People's Republic of China. However, China is now incorporating
marketing mechanisms such as competition so they're reaching out and heading towards
more market economy
• However, China has begun to incorporate some market mechanisms, such as competition,
into its economy.
• 21 Source: academics.wellesley.edu
As a summary: lets say planned economy is when the govt is ruling and directing the
economy and all means of production such as land, labour, and capital are all state owned
and controlled by the govt.
• Planned Economy (Command Economy)
• Economy directed by the government
• All means of production (land, labour, capital) are state owned and controlled
• The government makes all economic choices of what to produce, how to produce, how to
distribute
• Mixed Economy
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Overview of economics: getting organized: market, command, and mixed economies. In terms of economics we have main types of economics: market, command, and mixed. Not all these economies are organized in the same way but these are the best categorization that we can do. The three major way that economics can be organized or categorized are market, Command, and mixed economies: not all economies are organized in the same way, the three major ways they can be organized are as a market economy, a command economy, or a mixed economy, market economy. In a market economy, consumers and businesses decide what they want to produce and purchase in the marketplace. Market economy: in a market economy, the consumers and businesses are the boss, they decide what to produce and buy (sell and buy) In a market economy consumers and businesses decide what to produce and what to purchase ex.
