Command economy with some household choice

Producers

Households

MARKET ECONOMY

Producers

Households

Fig.1. Simple models of economic system.

When comparing the performance of different systems, the economist can use a number of measurements: the distribution of income, growth in output, technological advance, stability, output per head and so on. However, such a comparison is unlikely to produce a conclusive or acceptable answer about the superiority of any system.

Comprehension:

1. What does economics study?

2. What is macroeconomics?

3. What is microeconomics concerned with?

4. Name three fundamental questions all communities are confronted with.

5. Give the classification of economic systems.