Department of Management Information Systems Assignment Solution

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Department of Management Information SystemsCourse Name:MicroeconomicsCourse Code:MIS-107Assignment on“Advantages and Limitations of Different Economic Systems”Submitted ToMd. Ariful IslamAssistant ProfessorDepartment of MIS, FBS,University of Dhaka.Submitted ByTazrian Ferdous FaritaRoll: 029-15-058, Section: B,Department of MIS, FBS,University of Dhaka.
Advantages and Limitations of Different Economic SystemsAn economic system is a malleable system to regulate production, resourceallocation, exchange, and distribution of goods and services in a society or ageographic area. Economic system can be categorized into four main types. Theseare Market Economy, Command Economy, Mixed Economy, and Islamic Economy.Market EconomyA market economy is an economy where most resources are owned andcontrolled by individuals, and allocated through voluntary market transactiongoverned by the laws of demand and supply.AdvantagesIn a market economy, prices of goods and services are determined by thelaws of demand and supply.Producers compete with each other by offering wider variety of goods,therefore consumers have more choices which might lead to lower prices.It provides a competitive edge and increases the chance for wealth.Competition pushes businesses to be efficient keeping the costs down andproduction high.Encourages successful businesses to invest in companies, thus increasingthe quality of productions.DisadvantagesPoor working conditions can result due to lack of government regulations.Private firms will not be willing to provide public goods because it’s almostimpossible to charge any payment from the consumers.Free market may encourage harmful goods as private firms will provideanything that is profitable.Inequality in wealth and mobility exists because wealth tends to generatewealth.Command Economy
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