1. FEATURES
2. MERITS
2.1. -Decisions of allocation of resources always are in the interests of society as a whole and with specific national goals. - Unemployment could be largely avoided if the government carefully planned the allocation of labour. - Same income distribution - Produces the goods and services at efficiency level.
3. Business freedom is not totally offered for enterprise.
4. NECESSITY GOODS
4.1. GOODS WHICH ARE ESSENTIAL TO CONSUMERS DAILY NEEDS.EXAMPLE,FOODSTUFFS
5. CONSUMPTION OF FREE GOODS INVOLVES NO SACRIFICE AND NO OPPORTUNITY COST.THESE GOODS ARE NOT CREATED FROM SCARCE RESOURCES.IN CONTRAST,THESE ARE NATURALLY OCCURING GOODS THAT ARE UNLIMITED IN SUPPLY AND THUS NO PRICE IS CHARGED FOR THESE GOODS.
6. DEMERITS
7. Economy which uses Allah's creation natural resources with most efficient and fair way based on Islamic laws
8. - Mistake decide in economy (decision made by some people only) - Technology and innovation are undeveloped because all productions are decided by government
9. RR
10. Centrally planned or command economy / socialist economy
11. -Existence of wide gap between the rich and the poor. - Existence of unemployment problem.
12. GENERALLY,A PRODUCER PRODUCER PRODUCES A GOOD FOR PEOPLE WHO CAN AFFORD THE COST OF THE GOOD.THIS MEANS THAT PEOPLE WITH A HIGHER INCOME WILL BE ABLE TO AFFORD MORE GOODS,WHILE PEOPLE WITH A LOWER INCOME CAN AFFORD FEWER GOODS.TO ENSURE THAT SOCIETY AS A WHOLE CAN AFFORD GOODS THAT ARE PRODUCED,THE GOVERNMENT SHOULD INTRODUCE A FAIR DISTRIBUTION SYSTEM.
13. -Al Quran and Hadith was the main source in Islamic economics’ activities. - Individual free to own property - individual no give priority to profit in business - fair competition permitted - free to decide in economics
14. This system use market mechanism and allow government intervention in economy activities. - Price level determine by price’s mechanism but basic economy’s problem resolved together between government and private. - Individual and firm free to have properties
15. TYPES OF GOODS
15.1. ECONOMIC GOODS
15.1.1. CREATED FROM SCARCE RESOURCES,TGHEREBY THESE GOODS HAVE OPPORTUNITY COST,ARE LIMITED IN SUPPLY.AND ARE SCARCE IN RELATION TO DEMAND .THESE GOODS ALSO INVOLVE PRICE AND OPPORTUNITY PRICE.
15.2. FREE GOODS
15.3. PRIVATE GOODS
15.3.1. GOODS AND SERVICES OWNED BY HOUSEHOLDS.THESE GOODS CANNOT BE USED WITHOUT WITHOUT PERMISSION FROM THE OWNER.
15.4. PUBLIC GOODS
15.4.1. PUBLIC GOODS ARE PROVIDED BY THE GOVERNMENT.THESE GOODS ARE NON-EXCLUDABLE,i.e.NOBODY CAN BE PREVENTED,EXEMPTED OR BARRED FROM USING THEM.PUBLIC GOODS ARE ALSO NON-EXHAUSTIBLE,i.e.CONSUMPTION BY ONE PERSON WILL NOT REDUCE THE AVAILABILITY TO OTHERS.EXAMPLE ;TRAFFIC LIGHTS AND STREET LIGHTING
15.5. INFERIOR GOODS
15.6. GIFFEN GOODS
15.6.1. GOODS FOR WHICH DEMAND GOES UP WITH THE RISE IN PRICE.EXAMPLE,WHEAT,LOW QUALITY RICE,FROZEN FOOD
15.7. NORMAL GOODS
15.7.1. GOODS USED BY CONSUMERS IN ORDER TO MAKE THEIR LIVES COMFORTABLE.GOODS FOR WHICH DEMAND RISES AS INCOME RISES.EXAMPLE,TABLECHAIRS,RADIOS
15.8. LUXURY GOODS
15.9. MERIT GOODS
15.9.1. GOODS FOR WHICH THE CONSUMPTION IS DEEMED TO BE INTRINSICALLY DESIRABLE IF THE CONSUMERS ARE UNWILLING TO PURCHASE SUCH GOODS,i.e.PEOPLE CAN BE EXCLUDED FROM CONSUMING THESE GOODS.EXAMPLE,STATE EDUCATION,PUBLIC HEALTH CARE
15.9.1.1. GOODS FOR WHICH DEMAND DECREASES WHEN THE INCOME OF A CONSUMER INCREASES BEYOND A CERTAIN LEVEL.EXAMPLE,PUBLIC TRANSPORT,SECOND-HAND CARS
16. CONCEPT OF MICROECONOMIC PROBLEMS
16.1. SCARCITY
16.1.1. WANTS WHICH ARE ALWAYS EXCEEDING LIMITED RESOURCES MEANT TO SATISFY THEM.PROBLEMS OF SCARCITY OCCUR WHEN GOODS AND SERVICES ARE LIMITED COMPARED TO MAN
16.2. PROBLEMS OF CHOICE
16.2.1. SINCE THERE ARE NOT ENOUGH AVAILABLE RESOURCES TO SATISFY THE WANTS OF INDIVIDUALS AND SOCIETIES,INDIVIDULAS AND SOCIETIES MUST MAKE CHOICES AMONG COMPETING ALTERNATIVES.
16.3. OPPORTUNITY COST
16.3.1. OPPORTUNITY COST IS THE COST OF ONE CHOICE IN TERMS OF THE BESTFORGONE ALTERNATIVE.IF YOUCANNOT OBTAIN WHAT YOU NEED,THEN YOU HAVE TO CHOOSE AMONG THE ALTERNATIVES.
17. BASIC ECONOMIC PROBLEMS
17.1. WHAT MIX OF GOODS AND SERVICES WILL BE PRODUCED?
17.2. HOW MUCH GOODS AND SERVICES SHOULD BE PRODUCED?
17.2.1. TO OVERCOME THIS BASIC ECONOMIC PROBLEM,A PRODUCER MUST IDENTIFY THE QUANTITY OF DEMAND IN THE MARKET .IF THERE IS A HIGH DEMAND FOR A PARTICULAR GOOD THE PRODUCER WILL INCREASE PRODUCTION OF THE GOOD.IF THERE IS A LOW DEMAND,THE PRODUCER MUST DECREASE THE PRODUCTION.
17.2.1.1. THERE ARE INSUFFICIENT AVAILABLE ECONOMIC RESOURCE TO FULFIL MAN'S UNLIMITED WANTS.THEREFORE,SOCIETY MUST CHOOSE THE GOODS THAT WILL BE PRODUCED AND THE GOODS THAT MUST BE FORGONE AT CERTAIN TIME
17.3. HOW IS OUTPUT PRODUCED ?
17.3.1. IF THE COST OF LABOUR IS LESS THAN THE COST OF CAPITAL,THE PRODUCER SELECTS THE LABOUR-INTENSIVE PRODUCTION METHOD.IF THE COST OF CAPITAL IS LESS THAN HE COST OF LABOUR,THE PRODUCER OPTS FOR CAPITAL-INTENSIVE PRODUCTION
17.4. FOR WHOM SHOULD THE PRODUCT BE PRODUCED ?
18. Free market economy / capitalist / laissez faire
18.1. Is an economy system was operation without government intervention
18.2. FEAUTRES
18.2.1. -Decisions are taken by individual and firm with no government intervention. - It usually associated with a pure capitalist, where land and capital are privately owned. - The price mechanism used in this system whereby changes in price in response to change in demand and supply have the effect of making demand equal to supply.
18.3. MERITS
18.3.1. - Individual are free to make their own economic choice - Freedom to workers and firm to choose where to work and what production methods to use.
18.4. DEMERITS
19. Centrally planned or command economy / socialist economy
19.1. DEMERITS
19.2. - Decision are taken by the government or central authorities - It usually associated with a socialist or communist economy system, where land and capital are collectively owned. The government or central authorities plan the allocation of resources.
20. Mixed economy
20.1. Is a economy system that incorporates a mixture of private and government ownership or control ( capitalism and socialist)
20.2. FEATURES
20.3. MERITS
20.3.1. - The government will try to reduce gap of income between rich and poor people. ( taxes and subsidies) - Government will also control the existence of monopolies
21. Islamic economy
21.1. FEATURES
21.2. MERITS
21.2.1. Good in the world and afterworld - Free competition
22. ARE UNIQUE AND HAVE FEELINGS
22.1. WAGES
23. THE OVERALL STUDY OF A COUNTRY'S ECONOMIC ACTIVITIES
24. ECONOMY DEFINED AS A RESEARCH ON HOW SOCIETY UTILIZES LIMITED RESOURCES TO SATISFY THEIR UNLIMITED WANTS
24.1. HOUSEHOLDS
24.2. FIRMS
24.2.1. USES THE GOODS AND SERVICES
24.3. GOVERNMENT
25. ENTREPRENEUR
25.1. AN ENTREPRENEUR IS A PERSON WITH THE SKILLS AND ABILITY TO ORGANIZE PRODUCTION AND BEAR RISKS.
25.1.1. PROFIT
26. CAPITAL
26.1. CAPITAL CONNSISTS OF ASSETS SUCH AS EQUIPMENT,MMACHINERY AND RAW MATERIALS
27. LABOUR
27.1. LABOURERS
27.1.1. MAY BE SKILLED OR UNSKILLED
27.1.2. CAN BE MOVED FROM ONE LOCATION TO ANOTHER
27.2. LABOUR IS PHYSICAL AND INTELLECTUAL SERVICES PROVIDED BY MAN
28. MICROECONOMICS
28.1. THE STUDY OF SMALL ECONOMIC UNITS,e.g.INDIVIDUALS,FIRMS
29. MACROECONOMICS
30. ECONOMIC RESOURCES
30.1. LAND
30.1.1. THE SUPPLY OF LAND IS INHERENTLY FIXED IN LOCATION AND GEOGRAPHY
30.1.1.1. RENT
30.1.2. MINERALS,OIL DEPOSITS
30.1.3. THE VALUE OF LAND IS DEPENDENT ON QUALITY AND LOCATION