<< Chapter < Page Chapter >> Page >

Economic and management systems

Grade 8

The economic cycle

Module 3

Economic systems

Assessment standard 1.3:

Economic systems

When you have completed this section, YOU WILL BE ABLE TO EXPLAIN HOW DIFFERENT ECONOMIC SYSTEMS ADDRESS THE ECONOMIC PROBLEM. (E.g. a planned, market-driven, mixed economy)

The central question that humankind has to solve in day-to-day living, is how to SATISFY THEIR NEEDS with the LIMITED MEANS available, i.e. how to apply the scarce resources to provide in as many as possible of the experienced needs. During this process answers must continually be found for the following:

WHAT must be produced?

HOW must it be produced?

FOR WHOM must it be produced?

As different countries (nations) differ from one another with regard to customs, tastes, culture and preferences, it is improbable that all nations will respond to these issues in a similar manner when using their resources for the satisfaction of their needs. Some nations, for instance, have a greater tendency towards sharing their possessions, to everybody’s advantage, while people in other nations may be more inclined to selfishly claim their “power” and “wealth” for themselves, with no regard for the rest. The way in which people think and behave will determine the answers to the above questions. This results in the development of a particular economic system that determines the nature of the economic process.

An ECONOMIC SYSTEM therefore involves institutions and/or rules that regulate the processes of production, consumption and distribution, as well as the development of characteristic features, that distinguish economic SYSTEMS from one another. To distinguish ECONOMIC SYSTEMS from one another, answers are required to the following questions:

How or by whom are decisions taken?

What is the spur or impetus that leads to decisions being taken?

How is the right of possession with regard to resources for production regulated?

How or by whom are the activities of producers and consumers regulated?

It is possible to distinguish between the following TWO economic systems by considering the above questions:

MARKET DRIVEN SYSTEM (CAPITALISM) PLANNED SYSTEM (COMMUNISM)
  1. Decisions taken by private individuals.
Decisions taken according to government’s central plan.
B. Striving for the highest possible gain. Striving for the best interests of society.
C. Private ownership of sources of production. Common ownership of sources of production.
  1. Activities regulated by supply and demand.
Activities regulated by central planning.

CAPITALISM / COMMUNISM

Activity 1:

Explain what you understand points A to D to mean with regard to the practical situation that results from the economic structure of a country.

CAPITALISM COMMUNISM
  1. Regarding production:
Regarding consumption:
Regarding job:
Regarding settlement:
  1. Regarding production
Regarding investment
  1. Regarding ownership:
  1. Regarding production:
Regarding consumption:
Regarding trade:
Regarding prices:

In CAPTALISM, which is also known as the FREE MARKET SYSTEM, the emphasis is on private ownership of property, dependence on the functioning of the market mechanism (supply and demand), as well as the principle of own interest and the continuous pursuance of gain or profit. In COMMUNISM, or the CENTRALLY PLANNED/CENTRAL PLANNING SYSTEM, the emphasis is on state ownership of the means of production and dependence on the central plan of the government. The latter system is based on the idea that the interests of the community should have greater weight than those of the individual and that production and consumption should be geared towards equal distribution of goods rather than towards profit.

At this point it must be pointed out that there is no place in the world where either system is present in its “pure” form. In most countries, the economy is divided into two sectors, with some decisions being left to the market mechanism and others left in the hands of central planning. In this way, it is possible to get the best of both systems. When the two systems are used in conjunction in this way, we refer to a MIXED ECONOMIC SYSTEM. We also have a mixed economic system in South Africa, with certain economic functions being undertaken by private individuals (the private sector) and other functions being undertaken by the state (the public sector).

Activity 2:

MIXED ECONOMIC SYSTEM OF SOUTH AFRICA

Make use of the table below to indicate which of the given functions in the South African economy are provided by the private sector and which by the central authority. In each case also name the institution that provides the service.

[LO 1.3]

SERVICE SUPPLIER: (PRIVATE OR STATE) institutions
Telecommunication
Transport
Electricity
Armaments
Water supply
Sanitation, sewage and refuse removal
Medical services
Security services

Assessment

Learning Outcomes(LOs)
LO 1
the economic cycleThe learner will be able to demonstrate knowledge and understanding of the economic cycle within the context of ‘the economic problem’.
Assessement Standards(ASs)
This is evident when the learner:
  • describes the historical development of money and its role in societies and their economies;
  • discusses how trade (import and export) addresses the economic problem (choice and opportunity cost), as well as the role of banks in investing in the economy;
  • explains how different economic systems address the economic problem (e.g. planned, market and mixed economies);
  • discusses the role, rights and responsibilities of trade unions;
  • discusses the role, rights and responsibilities of trade unions;

Overview

Activity 1:capitalism / communism

CAPITALISM COMMUNISM
  1. Regarding production:
Individual choice re what, how Central committee decides for whom, what
Regarding consumption: Variety of goods, wide selection Goods limited, hardly any choices
Regarding job: Able to follow career of choice Placed/trained according to aptitude and country’s needs
Regarding settlement: Free to choose any location Private settlement not allowed
  1. Regarding production
Decisions led by greatest profit State owns means of production
Regarding investment Directed towards highest profit Prescribed by central plan
  1. Regarding ownership:
Private ownership of means of production State owns means of production
  1. Regarding production:
Market/demand determines production Produces according to central production plan
Regarding consumption: Price/supply determines No choices or preferences
Regarding trade: Free choice regarding trading Under control of cooperative shops

Activity 2: mixed economic system of south africa

SERVICE SUPPLIER: (PRIVATE OR STATE) institutions
Telecommunication
  • State
  • Telkom
  • Private sector
  • MTN, Cell C, Vodacom
Transport
  • State
  • Spoornet
  • Private sector
  • Pickfords, etc.
Electricity
  • Private sector
  • ESKOM
  • Local authorities
  • on behalf of ESKOM
Armaments
  • Private sector
  • DENEL
  • previously the State)
  • ARMSCOR
Water supply
  • State
  • through local authorities
Sanitation, sewage and refuse removal
  • State
  • through local authorities
Medical services
  • State
  • State hospitals
  • Private sector
  • Netcare (e.g. NI City, etc.)
Security services
  • State
  • State
  • Private sector
  • Private sector

Questions & Answers

anyone know any internet site where one can find nanotechnology papers?
Damian Reply
research.net
kanaga
Introduction about quantum dots in nanotechnology
Praveena Reply
what does nano mean?
Anassong Reply
nano basically means 10^(-9). nanometer is a unit to measure length.
Bharti
do you think it's worthwhile in the long term to study the effects and possibilities of nanotechnology on viral treatment?
Damian Reply
absolutely yes
Daniel
how to know photocatalytic properties of tio2 nanoparticles...what to do now
Akash Reply
it is a goid question and i want to know the answer as well
Maciej
characteristics of micro business
Abigail
for teaching engĺish at school how nano technology help us
Anassong
Do somebody tell me a best nano engineering book for beginners?
s. Reply
there is no specific books for beginners but there is book called principle of nanotechnology
NANO
what is fullerene does it is used to make bukky balls
Devang Reply
are you nano engineer ?
s.
fullerene is a bucky ball aka Carbon 60 molecule. It was name by the architect Fuller. He design the geodesic dome. it resembles a soccer ball.
Tarell
what is the actual application of fullerenes nowadays?
Damian
That is a great question Damian. best way to answer that question is to Google it. there are hundreds of applications for buck minister fullerenes, from medical to aerospace. you can also find plenty of research papers that will give you great detail on the potential applications of fullerenes.
Tarell
what is the Synthesis, properties,and applications of carbon nano chemistry
Abhijith Reply
Mostly, they use nano carbon for electronics and for materials to be strengthened.
Virgil
is Bucky paper clear?
CYNTHIA
carbon nanotubes has various application in fuel cells membrane, current research on cancer drug,and in electronics MEMS and NEMS etc
NANO
so some one know about replacing silicon atom with phosphorous in semiconductors device?
s. Reply
Yeah, it is a pain to say the least. You basically have to heat the substarte up to around 1000 degrees celcius then pass phosphene gas over top of it, which is explosive and toxic by the way, under very low pressure.
Harper
Do you know which machine is used to that process?
s.
how to fabricate graphene ink ?
SUYASH Reply
for screen printed electrodes ?
SUYASH
What is lattice structure?
s. Reply
of graphene you mean?
Ebrahim
or in general
Ebrahim
in general
s.
Graphene has a hexagonal structure
tahir
On having this app for quite a bit time, Haven't realised there's a chat room in it.
Cied
what is biological synthesis of nanoparticles
Sanket Reply
what's the easiest and fastest way to the synthesize AgNP?
Damian Reply
China
Cied
types of nano material
abeetha Reply
I start with an easy one. carbon nanotubes woven into a long filament like a string
Porter
many many of nanotubes
Porter
what is the k.e before it land
Yasmin
what is the function of carbon nanotubes?
Cesar
I'm interested in nanotube
Uday
what is nanomaterials​ and their applications of sensors.
Ramkumar Reply
Got questions? Join the online conversation and get instant answers!
Jobilize.com Reply

Get the best Algebra and trigonometry course in your pocket!





Source:  OpenStax, Economic and management sciences grade 8. OpenStax CNX. Sep 11, 2009 Download for free at http://cnx.org/content/col11040/1.1
Google Play and the Google Play logo are trademarks of Google Inc.

Notification Switch

Would you like to follow the 'Economic and management sciences grade 8' conversation and receive update notifications?

Ask