Economic and Legal System

Economic System

What is Economics?

Economics
o Is the science that deals with the production, distribution, and consumption of goods and services, or the material welfare of humankind.

What is Economic System?

Economic System
o An economic system is comprised of the various processes of organizing and motivating labor, producing, distributing, and circulating of the fruits of human labor, including products and services, consumer goods, machines, tools, and other technology used as inputs to future production, and the infrastructure within and through which production, distribution, and circulation occurs.

Satisfying Needs and Wants

What are needs? What are wants?

Goods o are things that you can see and touch. Services o are activities that are consumed at the same time they are produced.

What are Natural resources? What are Human resources?

Many natural resources are nonrenewable.

The Four Types of Economic System

Four very different types of Economic Systems have evolved as different societies have placed different emphasis on different goals and priorities in their efforts to answer the Three Key Economic Question.

Traditional Economy
Family or Community based on Economic System that relies on custom and ritual to make its choices.

Examples:
o Aborigines o Amazon Tribes o Any Substainance Economy

Market Economy
Individual or Consumer based Economic System that relies on the consumption choices of consumers.

Examples:
o U.S.A. o Japan o Any Capitalist Economy

Command Economy
Centrally Controlled Economy where the Government makes all decisions.

Examples:
o Cuba

o China o Any Communist Country or Dictatorship

Mixed Economy
Economic System that incorporates some Governmental involvement into a Market Based Economy.

Examples:
o U.S.A.

o Japan o Most Modern Economies

Legal System

What is Legal System?

Legal System
o

Of a country refers to the rules or laws that regulates behavior along with the processes by which the laws are enforced and through which redress for grievances is obtained.

Three Types of Legal System

Common Law
Theocratic Law

Civil Law

Common Law
o is based on tradition, precedent, and custom.

o Refers to a countrys legal history, precedent to cases that have come before the courts in the past, and custom to the ways in which laws are applied in specific situations.

Civil Law

o Is based on a detailed set of laws organized into codes.

Theocratic Law

o Is one in which the law is based on religious teachings.

Differences in Contract Law

Contract o Is a document that specifies the conditions under which an exchange is to occur and details the rights and obligations of the parties involved.
Contract Law o Is the body of law that governs contract enforcement.

Property Rights and Corruption

Property Rights o Refer to the legal rights over the use to

which a resource is put and over the use made of any income that may be derived from that resource.

Private and Public Action

Private Action o Refers to theft, piracy, blackmail, and the like by private individuals or groups.

Public Action o To violate property rights occurs when public officials, such as politicians and government bureaucrats, extort income, resources, or the property holders.

Source: Transparency International Global Corruption Report

Reported by: Michellin Ann Gutierrez BSBA 4th year