Question

a. What are the 4 economic systems discussed in Chapter 2’s PowerPoint? (0.4 point)

b. Which economic system will you prefer to have? Explain why. (0.4 point)

5. a. How does McEachern define public goods and services? (0.2 point)

b. Provide examples of two examples of public goods or services from which you personally benefit. Could these goods and services be provided by private markets? Why or why not? (0.6 point)

6. a. Assume that there is a positive relationship between age and height. What does it mean? (0.4 point)

b. If you build a two-dimensional graph between these two variables (age and height), what type of slope will you get? Explain. (0.2 point)

Answer 1

a) The four types of economic systems are

i) Traditional Economic system

ii) Command Economic System

iii) Market Economic System

iv) Mixed Economic System

b) A mixed economic system is a mixture of a market and a command economic system. This system describe market economies with a strong regulatory supervision and government control in specific areas. The private sector also run more efficiently and cut cost down than a government entity. The government can also get involve to correct market failure. Therefore, this type of economic system must be preferred to have.

5.a. According to McEachern , A good and services that, once produced, is available for all to consume, regardless of who pays and who doesn't is called public goods ans services. Such goods and services are non rival and non exclusive.

b.The two public goods or services by which common people benefited are fire and police service. These goods or services are non-rival and non exclusive. when one person uses the goods, it does not prevent others from using it. Therefore, these goods can not be provided by the private market.  

6. a. It means that as the age of a person increases then height also increase.

b. Since the relationship between age and height is positive, the the slope of the curve will be positive. It is calculated by the ratio of vertical change to the horizontal change.