In socialism the government owns the resources. The United States is capitalist, for example, and Norway is socialist. Capitalism and socialism have different approach to producing and to distributing goods but represent opposing belief system. Both the products and prices should be determined by the market forces, that’s
City University London Intermediate Macroeconomics 1 Coursework Joe Pearlman Question 1: Consider a representative agent with a utility function: U (C, l) = C 1/2 + l1/2 that he or she maximises subject to a constraint: C = w (h − l) − T + π where w, h, l, C, T , and π are wages and hours of time available, leisure, consumption, taxes, and dividend income. The production function for this economy is linear so that in equilibrium w = z, and the Production Possibilities Frontier is C = z (h − l) − G . To make the calculations easier assume h=1, z = 1. a) Find the Marginal Rate of Substitution. (4 marks) b) Find the Marginal Rate of Transformation. (4 marks) c) Setting MRS=MRT, solve the resulting equation algebraically for l as a function of G. (6 marks) d) What happens to consumption, wages and output as G increases?
Class and Monopoly by Stephen Resnick and Richard Wolff in Robert Pollin, Editor. Capitalism, Socialism, and Radical Political Economy: Essays in Honor of Howard J. Sherman. Cheltenham, UK and Northhampton, Ma, USA: Edward Elgar Publishers, 2000, pages 154-176. Monopoly refers to a power or political process, whereas class refers to economic processes. This paper offers a systematic examination of the diverse possible relationships between monopoly power and class structure.
According to the bizfinance.com, Capitalism and Socialism are political, economic and social systems in use by many countries around the world. In Capitalist system the means of production are owned by private individuals. That is to say, that main goal of such a system is maximizing profit for shareholders and partners. A good example of the Capitalists system is the United States of American where land and businesses etc are owned by private individual, but the Government interferes by putting in and enforcing necessary legislation to protect individuals. Competition between various businesses ensures a variety of goods and services to consumers, in a range of prices.
Microeconomics 201 First Midterm Chapter 1 Introduction: What Is Economics? 1.1 What Is Economics? 1) Economics is best defined as the study of: A) financial decision-making. B) how consumers make purchasing decisions. C) choices made by people faced with scarcity.
A government is tasked with deciding what goods and services are to be produced, how they will be produced and to whom they will be distributed. Careful consideration must be taken when calculating the opportunity cost associated with the choice to produce one good or service at the expense of another. “The phrase economic system refers to the organisational arrangements and processes through which a society makes its products and consumption decisions.” David W. Conklin (1,1991). The Market Economy Capitalist or free market economies can be described using the theory of ‘Laissez-faire’, a phrase believed to have been first coined by Jean-Baptiste Colbert in the 18th century which translated means ‘Let do’ and implies that a ‘let it be’ attitude should be adopted by government in relation to business and market decisions. This economic system relies solely on the market mechanism, supply and demand and the ability to pay.
Everything being equal, the WACC of a firm increases as the beta and rate of return on equity increases, as an increase in WACC means a decrease in valuation and a higher risk. A firms WACC is a very important both to the stock market for stock valuation purposes and to the company's management for capital budgeting purposes. In an analysis of a potential investment by the company, investment projects that have an expected return that is greater than the company's WACC will generate additional free cash flow and create positive NPV for stockholders. Since the WACC is the minimum rate of return required, the managers in the company should invest in the projects that generate returns in excess of the WACC. WACC is set by the investors (or markets), not by managers.
Is GDP a good enough indicator of understanding the economy? How GDP contributes to growth and development of a nation? What is GDP? The gross domestic product (GDP) is an aggregate measure of total economic production for a country and represents the market value of all goods and services produced by the economy during the period measured, including personal consumption, government purchases, private inventories, paid-in construction costs and the foreign trade balance (adding exports and subtracting imports). Gross domestic product, adjusted for inflation, also known as "real GDP", can tell economists whether an economy is growing or contracting from year to year or from quarter to quarter, a key determinant in deciphering whether the economy is expanding or in a recession.
This idea is at odds with the functionalists view that the family benefits society and the family members. Marxists have split the functions of the family into three main areas which they think prop up capitalism. The first of these is inheritance of property and the marxist argument that all social institutions, including the family, are shaped by the needs of those who own and controll societys productives forces i.e. the mode of production. In modern society it is a capitalist class who own and conrtrol these means of production.
Karl Marx believed that the means, relations, and mode of production all relate to the inequality in a capitalist society. What he is talking about when he says means of production in society are physical non-human inputs used to produce goods. A means of production could be a natural resource or it could also be technology. Whoever controls the means of production is going to have the most power. The capitalist owned the means of production in capitalism and therefore basically were able to control the economy.