In human life as a creature of God Almighty his day-to-day do many things, one of his human conduct economic action, the economy is one of the social sciences that study human activities related to production, or consumption of goods in need of humans.
Main economic issues and the influence of price mechanisms
Economic Problems for Manufacturers The main problem is the period of scarcity or deficiency as a result of the imbalance between the relatively unlimited needs of society and the factors of production available in a relatively limited society. Economic activity in a modern society includes various types of production, consumption and trade activities. Determining the goods and services to be produced (what to produce), Because resources are limited while the need is not limited, then not all goods and services needed by society can be produced. An economic society must determine what goods and services will be produced, which goods and services will be prioritized, what goods and services will be produced later, and what goods and services can not be produced. It is a matter of how to allocate existing resources (natural resources, people, and capital) into various production sectors to produce goods and services. Determining how goods are produced (how to produce) Which production method or technology will be used? Here, it is necessary to use the most efficient production method or technology, meaning that it can produce goods and services at the lowest cost (or cost). Economics views technology as an important factor in the production process. However, there are still many important factors to consider, such as production scale, managerial ability, climate, financial ability, and mental attitude. Determine for whom goods are produced (to whom), The economic misunderstanding of how production is shared is a matter of fairness and distribution of distribution. How to reward people who work more than others. Distribution issues are also raised with the question of how to guarantee some people who get production in the economy, even if they do not participate in production such as school children and elderly parents. Decisions for whom goods and services are produced are closely related to the concept of community justice in question. For egalitarian society, justice means every individual is entitled to get goods and services fairly in equal amounts, but for a fair utilitarian society is the distribution of goods or services according to their individual needs. Economic Problems for Consumers Human needs are so many and diverse, while goods and services as a tool to satisfy the needs is very limited. This fact is at the heart of economic problems. The economic problems faced by mankind, whether they as individuals, families, companies, or countries. The subject matter is: how with limited resources, humans can meet the needs of many and diverse.
Economic system
The economic system is a system used by a country to allocate its resources both to individuals and organizations in the country. The fundamental difference between an economic system and other economic systems is how the system regulates its production factors. In some systems, an individual may have all the factors of production. While in other systems, all these factors are held by the government. Most economic systems in the world are between these two extremes.
In addition to factors of production, the economic system can also be distinguished from the way the system regulates production and allocation. A planned economy gives the government the right to regulate production factors and production allocations. While in the market economy, the market is that regulate the factors of production and allocation of goods and services through supply and demand.
The planned economy
There are two main forms of planned economy, namely communism and socialism. As a form of Karl Marx's thought, communism is a system that requires governments to own and use all factors of production. However, he continued, government ownership of these factors of production is only temporary; When society's economy is deemed to have matured, the government must grant rights to these factors of production to the workers. The Soviet Union and many other Eastern European countries used this economic system until the end of the 20th century. Currently, however, only Cuba, North Korea, Vietnam and China use this system. Neither does the countries fully regulate the factors of production. China, for example, began to loosen regulations and allow private companies to control their own production factors.
The market
economy The market economy depends on capitalism and liberalism to create an environment in which producers and consumers are free to sell and buy the goods they want (within certain limits). As a result, manufactured goods and prevailing prices are determined by the supply-demand mechanism.
Mixed market
economy The mixed market economies market is a mix of market and planned economic systems. According to Griffin, there is no single country in the world that actually executes the market economy or planned, even countries like the United States. Although known to be very free, the United States government continues to issue some regulations that limit economic activity. For example the prohibition to sell certain items for minors, control of advertising, and others. So it is with planned economic countries. Currently, many Eastern Bloc countries have been privatized-changing the status of government firms into private companies.
