Introduction A system is a network of parts which interlock to form an overall pattern. An economic

An economic system defines how the various entities in an economy interact. People have defined an economic system variously to include government policies, which is very important especially in modern times. Ancient systems were pretty simple. Trade was done using systems like barter trade which was very straight forward. People only exchanged what they had for what they needed, or wanted. However, in modern monetary economies, the setting is quite intricate. Huge established companies have a lot of influence in the way business is done. Treaties and agreements are made every day, and governments have made numerous laws to define trade, thus warranting the need for a more comprehensive definition of what an economic system is. An economic system can now be described as an organized manner in which a particular government chooses to allocate goods and services in the country. Modern economic systems are about more than just trade. They define the values of a society, or a country, as well as the political structure of that society.

A command economy is an economy where the central government manages all or most resources. They make economic decisions and control productions so that can benefit people in any way. They control on what is being produced and how it is going to be produced. People favor this economy because they can rely on the government on supplying enough goods meanwhile keeping the prices low and affordable. Also command economies make sure productions that are being produced are environmentally friendly so that it won't be bad for the environment. Some of the advantages of command economy include low levels of inequality and unemployment. Another top advantage is adjusting the production rate and availability of completed goods. The government predicts if the demand is going to fall or rise by viewing if goods and items are used efficiently. The disadvantages of command economy include the lack of competition and efficiency. Even though planners try their best when it comes to making economic decisions based on analyzing their history of goods and service productions, they sometimes fall on shortage on goods and fail to meet demands and needs of people. Another disadvantage is misplaced incentives where central government controls prices, supplies and services/goods being produced that are not part of peoples' demands.

Scarcity: Scarcity is a problem everyone in the world faces, no matter how rich or how poor. There is simply not enough of everything (time, resources, etc.) to meet our unlimited wanted and needs. Part of economics is finding alternatives to certain resources or making best use of the limited resources. Wal-Mart employees felt the effects of scarcity, even though it is a multi-billion dollar company.

One example of a command economy is communism. In a government-directed economy, the marketplace plays little to no part in manufacture choices. Command economies respond slower to changes in consumer buying patterns and fluctuations and are much less elastic than market economies. (Gemma, 2014)

Just about anything in life can viewed as having systems (Baccarini 2013). They can be found anywhere from within nature to anywhere in society and business. To better understand the principle of systems and the theories associated with them it is important to define what a ‘system’ is. There have been many experts who have helped create and contribute to systems theory and they all have similar thoughts

One of the biggest breakthroughs in how we understand and guide change in organizations is systems theory and systems thinking. There are two main definitions of a system, an implicit and an explicit phrase, with the explicit phrase being used in system thinking by organizations. The definition refers to a system as being a collection of highly integrated parts or subsystems that attain a specific goal, through inputs that are processed into precise outputs. And thus if a part of this highly-linked system is changed, the overall system is also changed. This is what 's meant by a system being systemic, i.e. relating and affecting the system as a whole.

Part 1 Scarcity When humans moved from hunter/gatherer societies to villages and then cities, a division of labor occurred. Some people became producers of food, some processors, some the ancillary goods and services that are necessary for humans to live together. They found that sometimes there was a surplus of goods, and sometimes a lack of goods. This lack of goods is called the scarcity principle, and it is the fundamental economic principle of needing (or wanting) goods in a world that has limited resources. It means that in society, there will almost always be situations in which there are insufficient resources to fulfill all human wants and needs. Of course this also implies that at any given time, not all individual or group goals can be provided, which results in tradeoffs and substitutions.

Another important reason for the shift towards a mixed market economy is to curtail inefficient resource distribution. The larger and more complex the economy is, the greater the task of collecting and analyzing information essential to planning. For example, years ago in the Soviet Union, a massive drive towards industrialization took place. To achieve this, the Gosplan, which was the central planning agency in the Soviet Union, was placed with the task of preparing five year plans and annual plans that underlined the general direction in which the Soviet economy was to move. All factories were given targets that it had to achieve. This planning system functioned without the help of a price mechanism and the profit motive. To encourage the managers and workers of a factory, bonuses were promised to them if they could achieve output targets set by the planning agency. However as is the problem of central planning, the Gosplan couldn’t accurately identify consumer preferences, shortages, and surpluses with sufficient accuracy and hence production couldn’t be coordinated at the level of efficiency that the Soviet Government intended. Furthermore the poor flow of information between the planning agency and managers in the state farms and factories led to many inconsistencies in the plans. To compound the problem, the targets set by the Gosplan were often unrealistic and so people hardly ever got bonuses due to the difficulty of trying to meet those

George Bernard Shaw once wrote, “Our necessities in life are few, but our wants are endless.” This quote is an excellent example of the economic concept of scarcity. It is important that individuals grow to understanding and learn about economic scarcity, because without it, there will be no economics. Scarcity refers to limited resources such as goods or services that satisfy unlimited wants and needs of individuals. People will seek out goods and services to satisfy those needs. Over time

A command or planned economy is a system economy where everything about economy is controlled by the government. This means that the government determines what kinds of goods and services to be produced, using a method or manner of goods and services will be made up and who will consume those goods and services. So that, a command economy, it is easier for the government to control the inflation, unemployment and other economic problems. Command economy is benefit for the society because the government seeks to provide for everyone and it maximizes social welfare.

Economic systems are the systems of production and also an exchange of goods and services and also the allocation of the resources in a society. There are four types of the economic system that includes, traditional, market, command and the mixed economic

More specifically, the resources that are helpful to satisfy human’s demand are scarce. In addition, some resources are scarce when there are not freely available, which means their price are more than zero. Second, people have unlimited wants. This means everyone in this world always want more resources as long as they can satisfy these variable wants, for example, a new car, a nicer home, and more free time. Based on these two economic truths, one conclusion that although people’s wants, or desires, are virtually unlimited, the resources available to satisfy theses wants are scarce. This is so called the economic problem. When the economic problem is admitted, people will face several choices of economic behaviors. Should they work more for earning money to buy necessary scarce resources to satisfy their wants, or should they chose work less so that they can have more free time to have a rest and arrange their own life? Economy is created no other than helping people to solve these problem. Economics examines how people use their scarce resources to satisfy their unlimited wants. This means, beginning with resources, then goods and services, and finally focus on the heart of the matter-economic choice, which results from scarcity.

An economic system is the combination of the various agencies, and entities that provide the economic structure that defines the social community. Malaysia has adopting mixed economic systems. Mixed economic system is an economy where there is more government intervention than in a free market economy. Many of the activities of production, distribution, and exchange are undertaken by central government, but where there is more economic freedom for the individual than in a command economy.

“There ain’t no such thing as a free lunch.” Making decisions requires trading one goal for another.

‘Economic is the study of how society manages its scare resources.In most society,resource are allocated not by a single central planner but through the combined actions of millions of households and firms.(Mankiw,1998:4). However,who