P. 1 Classification according to the allocation of resources PPTPPT CH.2 BASIC ECONOMIC PROBLEMS 問題 What to produce? How to produce? For whom ( 為誰 ) to produce?

P. 2 Classification according to the allocation of resources PPTPPT Unlimited wants Limited resources Scarcity Choice What? How? For whom?

ECONOMIC SYSTEMS CLASSIFIED IN TERMS OF METHOD ( 方式 ) OF RESOURCES ALLOCATION ( 調配 ) Market economy: price mechanisms 機制 Planned ( 計劃 ) economy: the government draws 制訂 detailed 詳細 plans 的計劃 Traditional ( 傳統 ) economy: Mixed 混合 economy: the features 特徵 of all the above three types are mixed together 在一起 In reality, almost all economies are mixed economies. Hong Kong is a mixed economy which is weighted towards 偏向 a market economy. 4D 2/10

P. 4 Classification according to the allocation of resources PPTPPT 2.2 Market economy 2.3 Planned (command 指 令 )economy It is solved by prices. When people are willing to ( 願意以 ) pay for a good at a price, producers will be attracted ( 吸引 ) to produce the good. The government lays down ( 定下 ) rules for the types ( 類型 ) and quantities ( 數量 ) of goods to be produced. What to produce ( 生產 ) ? How different ( 不同 ) economic problems are solved ( 解決 ) in different economic systems ( 體系 )?

P. 5 Classification according to the allocation of resources PPTPPT 2.2 Market economy 2.3 Planned economy It depends ( 取決於 ) on the cost (= factor price) of different ways of production ( 不 同生產方式 ). Producers will try to maximize their gains ( 達致最大收益 ). Therefore, the least ( 最低 ) cost production method will be employed. It is the government’s decision ( 決定 ). How to produce? How different economic problems are solved in different economic systems?

P. 6 Classification according to the allocation of resources PPTPPT 2.2 Market economy 2.3 Planned economy Since there is a price for a good, people who are able ( 有能力 ) and willing to pay the price will get it. It is also determined ( 決定 ) by the government. For whom to produce? How different economic problems are solved in different economic systems?

P. 7 Classification according to the allocation of resources PPTPPT 2.3 Planned economies 2.2 Market economies Ownership ( 所有權 ) of Resources Owned by the state for all its people, i.e. socialist ( 社會主 義 ) economy. Owned by private individuals ( 私人 ) for their own gains, i.e. capitalist( 資本主 義 )economy. Ownership and allocation of resources in different economies.

P. 8 Classification according to the allocation of resources PPTPPT 2.3 Planned economies 2.2 Market economies Method ( 方式 ) of allocation ( 調配 ) of resources Choices are made centrally and planned by the government. Choices are made freely ( 自 由 ) by individuals in response to ( 因 應 ) market prices. Ownership and allocation of resources in different economies.

P. 9 Classification according to the allocation of resources PPTPPT How different economic problems are solved in different economic systems? How to produce? For whom to produce? What to produce? 2.4 Traditional economy It is determined ( 決定 ) by the basic needs for survival ( 生 存需要 ). Production techniques ( 技術 ) are very simple. It is determined by customs and values ( 習慣和價 值觀 ).

4D 5/10 Hong Kong can be described as a market economy because A.(2) only. B.(1) and (2) only. C.(2) and (3) only. D.(3) and (4) only. (1)there is no government involvement in any kinds of economic activities.no government involvement (2)all the problems of resource allocationall are solved by market prices. (3)most resources are privately-owned.privately-owned (4)the allocation of resources is mainly determined by prices.prices

Hong Kong can be described as a market economy because A.(2) only. B.(1) and (2) only. C.(2) and (3) only. D.(3) and (4) only. There would have to be some government services even in a market- oriented economy. 1 (1)there is no government involvement in any kinds of economic activities.no government involvement (2)all the problems of resource allocationall are solved by market prices. (3)most resources are privately-owned.privately-owned (4)the allocation of resources is mainly determined by prices.prices

Hong Kong can be described as a market economy because 2 Most, but not all, problems are resolved by market prices. A.(2) only. B.(1) and (2) only. C.(2) and (3) only. D.(3) and (4) only. (1)there is no government involvement in any kinds of economic activities.no government involvement (2)all the problems of resource allocationall are solved by market prices. (3)most resources are privately-owned.privately-owned (4)the allocation of resources is mainly determined by prices.prices

Hong Kong can be described as a market economy because 3 Ownership of resources can be used as a reference to identify a market economy. A.(2) only. B.(1) and (2) only. C.(2) and (3) only. D.(3) and (4) only. (1)there is no government involvement in any kinds of economic activities.no government involvement (2)all the problems of resource allocationall are solved by market prices. (3)most resources are privately-owned.privately-owned (4)the allocation of resources is mainly determined by prices.prices

Hong Kong can be described as a market economy because 4 Price is the major solution of the three basic economic problems in a market economy. A.(2) only. B.(1) and (2) only. C.(2) and (3) only. D.(3) and (4) only. (1)there is no government involvement in any kinds of economic activities.no government involvement (2)all the problems of resource allocationall are solved by market prices. (3)most resources are privately-owned.privately-owned (4)the allocation of resources is mainly determined by prices.prices

Hong Kong can be described as a market economy because D A.(2) only. B.(1) and (2) only. C.(2) and (3) only. D.(3) and (4) only. (1)there is no government involvement in any kinds of economic activities.no government involvement (2)all the problems of resource allocationall are solved by market prices. (3)most resources are privately-owned.privately-owned (4)the allocation of resources is mainly determined by prices.prices

P. 16 Classification according to the allocation of resources PPTPPT A.there is no government involvement ( 干涉 ) in any kind of economic activities. B.all problems ( 問題 ) of resource allocation ( 調配 ) are solved ( 解決 ) by ( 由 ) market prices. C.most resources are privately-owned ( 屬私 人所有 ). D.the resources allocation is mainly determined by ( 主要取決於 ) prices. Hong Kong can be described as ( 可說是 ) a market economy because ( 的原因是 )

P. 17 Classification according to the allocation of resources PPTPPT A.there is no government involvement in any kind of economic activities. B.all problems of resource allocation are solved by market prices. C.most resources are privately-owned. D.the resources allocation is mainly determined by prices. Hong Kong can be described as a market economy because Hint:Option B is false. Not all problems are resolved by market prices. Hint:Option A is wrong, since there would be some government services even in a market-oriented economy.

P. 18 Classification according to the allocation of resources PPTPPT A.there is no government involvement in any kind of economic activities. B.all problems of resource allocation are solved by market prices. C.most resources are privately-owned. D.the resources allocation is mainly determined by prices. Hong Kong can be described as a market economy because Hint: Option C is not the right reason for classifying the market economy.

P. 19 Classification according to the allocation of resources PPTPPT A.there is no government involvement in any kind of economic activities. B.all problems of resource allocation are solved by market prices. C.most resources are privately-owned. D.the resources allocation is mainly determined by prices. Hong Kong can be described as a market economy because D

P. 20 Classification according to the allocation of resources PPTPPT Hong Kong is a market economy. Resources allocation is mainly determined by _____________________ (the government / prices). prices