Traditnoil Economy: It is the old type of economic system. In this economic system tradions, beliefs and habits are the basic. These are the key points which run the whole society. Characteristics: It’s the basic economic. People use scarce resource to full fill there needs. they live only natural things such as by haunting, fishing and farming. Ther are the low level as they can only full fill there living requirements. These are the center of the tribes. Everyone has specific role in the tribe. Role are settled by the ancestor. Ancestor tech he next generation the habit,ritual of their tribe.
Different tribes trade with one another using the natural resources. For example if haunting tribe want some wish thr give some of their haunt to the dishing tribe or in return get the fish. They trade with things not money. Reference(About news) Example: Many societies like central Africa Mbuti,The Australian Aborignies. The Inuit of nothen canda for Centuries,the inuit ancestor tought their off spring how to live,survive in harsh enviroment or they next taught their off spring. Refrence (Ecnomic and pricipel) Advantage: In this every one know his rule in the tribe.
Everyone know his responsibility. It is less destructive to the environment Disadvantages: it has low standards of living. the Strict rules apply. Changing with the present situation does not occur. Reference(About News) Command Economics: The economic system with the central authority that makes most of the deciscions. IN command economics central authority has all the power. it decided What To Produce, How or Whom To produce. Characteristics: In command economics a central power is present. Central power maybe some agency or it usually a government.
Goverment makes the rules. Private sectors are restricted by the rule of goverment like property right. In command economics you can’t buy the property you just use it by government permission. Everything decided by government. If there need of doctors more people push toward the doctorate. Reference(Economics Principle and Practise) For Example: In present North Korea And Cuba are comman examples. Advantage: In this changes happens very drastically. Due to command economics you are able to do any things fastly. You can change a rural into the heavy industry in just year.
Same thing happened in Soviet Union there GNP increase from eight percent to fifty per cent. As a result the experienced a heavy Industry. Disadvantages: In this minor prodlems don’t solve easily. There is no benefits for the cosumers and the buyers. Nation produce only those things which they think necessary. A common man need need dos’t prefer. In the dis the decision is slow. Market economy: The system in which insvestment,production and distribution are based on the supply and demand and their prices are determined by the free price system.
In this system people make the choice in their own interest. There is a market in which buyers meet sellers and are price are held at a free price system. Reference(mixed Wikipedia and book) Characteristics: In this system there is freedom to everyone. Everyone buy the product of interest. People interest tells the producers What to produce. Producers are free to choose the method of How to produce . The sellers consumers gets give them the idea for whom t produce. IN this the word use Capitalism the private citizens own the units of production.
The market economy is the other word uses for the goods and services changed. Example: The best countries like U. K, Japan, Singapore, Australia e. t. c share the mutual benefit of market economy system. Advantage: Freedom is the main thing. Everyone has its Freedom. Buyers are free to buy things. Producers are free to produce. Whomthey want to hire. they are freely to choose everythings. Changing over the time. As first thy fuel prices were low people bought large vehicles but there is change in prices so company made the vehicle which is more fuel efficient.
The other advantage is the government restrictions are very low. Goverment only concern with the major issues like Nationl defence, Enviromental pollution. Disadvantage: Market economy does not give benefit to everyone. Some peoples who are old do no take baenefit from it. In the market economy producers only think of themselves. They only think of producing goods which benefit them. ( Why better Market Economy is better than other? Market economy is better because it has no restriction. It gives us the freedom.
It benefit both the buyer and seller. The other system has its restrictions. Market economy change fastly with the time adopt new techniques which is better then previous one. In the market prices determined automaticely. There is no strict rules fr setting the price. Demand and supple set the price. The competion is present due to which the consumer gets the best product at the best possible prices. Govrement can’t apply the restriction to the market which is the best thing of the market economy. FCCU Department of economics.