Scarcity

Resource allocation

Economic systems

Specialisation

Productivity

Opportunity cost

MYP Individuals & Societies Resource Allocation Notes

What Is The Simple Problem Economics Begins With?

Definition

Resource allocation

Assigning available resources or factors of production to particular uses selected from various possible options.

Economics begins with a simple problem: we have unlimited wants but limited resources.

Because everything exists in a finite quantity, societies must make choices about how to use what they have.

Those choices, made by consumers, producers, and governments, determine resource allocation.

What Are The Different Ways Economic Systems Allocate Resources?

Definition

Economic System

A way a society organizes production and distributes resources, deciding what to produce, how to produce it, and who receives it.

Societies have developed different economic systems to decide what to produce, how, and for whom.

These systems vary mainly by how much decision-making power lies with markets versus government planning.

At a broad level, two types are often contrasted:

Command economies
Market economies

Command economies use central control over production decisions

Definition

Command Economy

An economic system where key production and allocation decisions are mainly made by the government through planning and direction.

Historically, different forms of command-like organisation have existed, such as:

Slavery in some ancient economies to complete large projects
Feudalism in medieval societies where land ownership and production were controlled by monarchs and lords
Modern communism, which developed as a response to industrial-era inequality and poor working conditions, aiming to organise production through central planning

A key challenge is information

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Note

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Tip

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Definition

Paywall

(on a website) an arrangement whereby access is restricted to users who have paid to subscribe to the site.

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Note

Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam quis nostrud exercitation.

Excepteur sint occaecat cupidatat non proident

Tip

Lorem ipsum dolor sit amet, consectetur adipiscing elit.
Sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.
Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris.
Duis aute irure dolor in reprehenderit in voluptate velit esse cillum.

MYP Individuals & Societies Resource Allocation Notes

What Is The Simple Problem Economics Begins With?

What Are The Different Ways Economic Systems Allocate Resources?

Command economies use central control over production decisions

anim nostrud sit dolore minim proident quis fugiat velit et eiusmod nulla quis nulla mollit dolor sunt culpa aliqua

Duis aute irure dolor in reprehenderit

Excepteur sint occaecat cupidatat non proident

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What Is The Simple Problem Economics Begins With?

What Are The Different Ways Economic Systems Allocate Resources?

Command economies use central control over production decisions

anim nostrud sit dolore minim proident quis fugiat velit et eiusmod nulla quis nulla mollit dolor sunt culpa aliqua

Duis aute irure dolor in reprehenderit

Excepteur sint occaecat cupidatat non proident

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Social Groups and Human Interaction4 subtopics

Origins of Empires4 subtopics

Structures and Functions of Empires5 subtopics

Decline and Collapse of Empires4 subtopics

Human Impacts on Natural Environments4 subtopics

Population Change and Social Effects6 subtopics

Urban Systems and Sustainable Management4 subtopics

Economic Decision-Making and Production6 subtopics

Trade, Fairness and Global Exchange4 subtopics

Development and Standards of Living4 subtopics

Sustainable Use of Earth’s Resources4 subtopics

Historical Perspectives and Changing Worldviews3 subtopics

MYP Individuals & Societies Resource Allocation Notes

Social Groups and Human Interaction4 subtopics

Origins of Empires4 subtopics

Structures and Functions of Empires5 subtopics

Decline and Collapse of Empires4 subtopics

Human Impacts on Natural Environments4 subtopics

Population Change and Social Effects6 subtopics

Urban Systems and Sustainable Management4 subtopics

Economic Decision-Making and Production6 subtopics

Trade, Fairness and Global Exchange4 subtopics

Development and Standards of Living4 subtopics

Sustainable Use of Earth’s Resources4 subtopics

Historical Perspectives and Changing Worldviews3 subtopics

What Is The Simple Problem Economics Begins With?

What Are The Different Ways Economic Systems Allocate Resources?

Command economies use central control over production decisions

anim nostrud sit dolore minim proident quis fugiat velit et eiusmod nulla quis nulla mollit dolor sunt culpa aliqua

Duis aute irure dolor in reprehenderit

Excepteur sint occaecat cupidatat non proident

Unlock the rest of this chapter with a free account

What Is The Simple Problem Economics Begins With?

What Are The Different Ways Economic Systems Allocate Resources?

Command economies use central control over production decisions

anim nostrud sit dolore minim proident quis fugiat velit et eiusmod nulla quis nulla mollit dolor sunt culpa aliqua

Duis aute irure dolor in reprehenderit

Excepteur sint occaecat cupidatat non proident

Unlock the rest of this chapter with a free account