ECON 103 Lecture Notes - Lecture 4: Planned Economy, Laissez-Faire, Demand Curve

• School: UMASS-Amherst
• Department: Economics
• Course: ECON 103
• Professor: Russell Janis

Document Summary

Important announcements: e(cid:454)t(cid:396)a c(cid:396)edit assig(cid:374)(cid:373)e(cid:374)ts a(cid:396)e (cid:373)a(cid:396)ked (cid:449)ith (cid:858)*(cid:859) o(cid:374) sapli(cid:374)gplus, the first exam is on thursday, october 11th, 2018 from 7-9pm. This conflicts with the exam for math 127 and the makeup exam for econ 103 will be conducted on friday, October 12th, 7-9pm: p(cid:396)ofesso(cid:396) ja(cid:374)is (cid:449)ill upload (cid:396)ele(cid:448)a(cid:374)t (cid:395)uestio(cid:374)s f(cid:396)o(cid:373) last (cid:455)ea(cid:396)(cid:859)s e(cid:454)a(cid:373). Who makes the decision of how to ration our scare resources: the government- an economy where the government decided how to ration the eco(cid:374)o(cid:373)(cid:455)(cid:859)s (cid:396)esou(cid:396)ces is called a co(cid:373)(cid:373)a(cid:374)d eco(cid:374)o(cid:373)(cid:455). This s(cid:455)ste(cid:373) e(cid:374)su(cid:396)es social (cid:449)elfare: the free market (laissez faire)- in this case market signals such as price decide makes the decisions on how the resources are rationed. This system focuses on profitability: mixed systems: this is what is adopted by most countries, in this case both the government and the free markets make these rationing decisions together. This system ensures social welfare while leaving room for profitability.