Choice of solutions to major economic issues. The main issues of economics

The main problem of economics can also be presented as a problem of choice. Indeed, if each factor used to meet various needs is limited, then there is always the problem of alternative use and the search for the best combination of production factors, that is, the problem of choice. This problem is reflected in the statement three main questions economy.

Three main questions of economics:

What? – goal setting problem... - Which of the possible goods and services should be produced in this economic space and at this time?

How? – production problem.- For what combination of production resources, with the use of what technology should be produced selected from possible options goods and services?

For whom? – distribution problem.- Who will buy the selected products and pay for the benefits? How should the gross income of society from the production of these goods and services be distributed?

The fourth question, which also inevitably arises before every society, is the question: How? How to get rid of waste generated in the process of life, how, without reducing the level of consumption, to maintain the ecological balance in nature. This disposal problem.

5. Production opportunities in the economic system and the problem of choice.

The production capabilities of the economic system are limited by the scarcity of the resources used. Moreover, the limitedness of all economic resources remains and even increases with the development of society. This is due not only to the depletion of irreplaceable natural resources, but also by the fact that consumption constantly gives impetus to the development of production, that is, new goods and services are created, they change quality characteristics, which causes an increase in demand for consumer and investment goods. And each time society is forced to decide which of these goods to produce with available resources and on what scale.

The problem of choice in any economic system (be it a family, a firm, a state) can be illustrated using economic model "Frontier of production possibilities"... And also, this model allows you to clearly demonstrate such fundamental economic concepts as limited resources, alternative costs.

To build a model, we will plot the number of consumer goods (X) on the abscissa axis, and the number of means of production (Y) on the ordinate axis (see Fig.).

Capital goods (Y)

Consumables (X)

O X B X C

ABCD curve, called production frontier, characterizes the maximum possible volumes of production of means of production and consumer goods with the full use of all available resources. Each point on this curve represents a certain combination of these two types of goods (for example, point B represents a combination of X B units of commodities and Y B units of capital goods.

The production possibility frontier graph illustrates the fact that an economy that fully uses productive resources cannot increase the production of any good without sacrificing another good. The functioning of the economy on the border of its production capabilities testifies to its effectiveness.

Based on this, the choice of the combination corresponding to point F is regarded as unfortunate for a given society, since it does not allow it to efficiently use production resources. Choosing such a point, we would accept either the presence of unused resources (for example, unemployment), or low efficiency of their use (for example, with large losses, including working time). Production on the basis of the choice of point E is generally unfeasible, since this point lies beyond the production possibilities of this economic system.

Let's compare points B and C. By choosing point B, we prefer to produce fewer commodities (X B) and more means of production (Y B) than choosing point C (X C, Y C). More precisely, when moving from point B to point C, we will additionally receive Δ X = OX C - OX B units of consumer goods, donating for this ΔY = OY B - OY C units of means of production. The amount of one product that must be donated to increase the production of another product per unit is called alternative costs or the cost of missed opportunities.

The ABCD curve is convex. This is due to the fact that one resource can be used more productively in the production of consumer goods, others - means of production.

If new technology, new technological processes are introduced simultaneously and evenly in all industries, then the production possibilities frontier AD will shift to the position of the dotted line А 1 D 1, the possibilities of output of both means of production and consumer goods with the same resources will increase approximately equally ( see figure).

If innovations are carried out mainly in the industries that produce the means of production, the increase in the area of ​​production opportunities will be skewed to the right (see Fig.).

Lecture:

Major economic issues

What to produce? It means to decide what, in what quantity and what quality economic goods (goods and services) need to be created.

How to produce? This means deciding what resources, technologies will be used in the production of certain economic benefits.

For whom to produce? This means to determine for which categories of people (market segment) the goods produced will be intended, for example, toys for children, cosmetics for women.

Economic system Is a set of principles and rules economic relations arising in the process of production, distribution, exchange and consumption of goods.

Scientists distinguish traditional, planned (command), market and mixed economic systems. Let's consider their characteristic features.

Traditional economic system

Signs:

• the solution of the issues of what, how and for whom to produce is based on traditions (continuity);
• the backbone of the economy is Agriculture;
• communal form of ownership;
• universal manual labor and primitive production technologies that restrain the growth of labor productivity;
• subsistence farming, production is aimed at satisfying own needs rather than for sale;
• low trade turnover, correspondingly low level of commodity-money relations;
• closed society, the existence of caste or class divisions that do not allow people to move from one social group to the other, as a result of which socio-economic progress is constrained.

The traditional economic system has its advantages and disadvantages. The advantages are continuity, ease of organization of production, low pollution environment... The disadvantages are low incomes, a shortage of consumer goods, and limited economic growth.

A planned (command) economic system is one of the hallmarks of a totalitarian political regime. This type dominated during the Soviet era, but functions in modern states, for example, in North Korea, in Cuba.

Signs:

• the solution of the main economic issues belongs to the centralized state body, which carries out directive production planning;
• the basis of the economy is agriculture and foreign trade;
• the means of production are owned by the state, and only property intended for housekeeping can be in private ownership;
• the emergence of a social division of labor;
• administrative regulation of prices;
• market monopolization.

Market economic system

The market economy implies freedom entrepreneurial activity, which is guaranteed by the state. The basis of the relationship between producers and consumers is individual interest and self-interest.

Signs:

• solving the issues of what, how and for whom to produce belongs to the owner, manufacturer, consumer;
• the basis of the economy is the service sector;
• a variety of forms of ownership is recognized, but private ownership prevails;
• deepening of the social division of labor;
• trade relations are developing widely;
• pricing is free and regulated by market laws;
• competition;
• the achievements of scientific and technological revolution are widely introduced into production.

The main advantage of a market economy is competition, which is necessary for manufacturers to strive to create quality products, and consumers have a wide choice of a particular product or service (assortment). Another advantage is the interest of producers to use resources efficiently and to meet the maximum needs of people at the lowest cost. This system also has disadvantages. These are income inequality, a significant social gap between the poor and the rich, unemployment, periodic economic crises... The problem of negative external (side) effects is acute. For example, the operation of a pulp and paper mill causes water pollution (release of waste into water); increased use of cars by people leads to air pollution. The state is forced to intervene in solving such problems, eliminating market imperfections.

This type of economic system combines the features of the command and market systems with a predominance of the latter. Therefore, one of important signs mixed economy is multi-sectoral, when the role of both the state and private individuals is significant in production. But there may be features in this system traditional economy... For example, perfume production in France is traditional. The role of the state in a mixed economy is great and consists in:

• preventing monopoly on the production of economic goods (with the exception of strategically important goods, for example, military equipment and weapons, space equipment);
• avoiding shortages of goods and services;
• stabilization of prices;
• providing employment able-bodied population and providing assistance to disabled citizens (for example, disabled people, pensioners);
• production of public goods (eg health and education);
• protection from unscrupulous market participants;
• in the fight against negative externalities of production.

An economic system is a form of organization of the economic life of a society.

Elements of the economic system:

Socio-economic relations. They are based on the forms of ownership of economic resources that have developed in each economic system.

Organizational forms economic activity(subsistence farming, commodity economy, etc.).

An economic mechanism is a way of regulating economic activity at the macroeconomic level, as well as a system of incentives and motivations that are guided by participants in economic life.

Specific economic ties between enterprises and organizations.

In any economic system, the economy solves 3 main questions:

What to produce?(That is, what goods and services, in what quantity, by what date).

How to produce?(What resources to use, in what enterprises, with the help, what technology, etc.).

For whom to produce?(That is, the target consumer group).

Question 4. The main types of economic systems and their characteristics.

Economic systems differ in:

The way to solve the main economic issues.

By the type of ownership of the most important types of resources.

From the point of view of these criteria, the following types are distinguished economic systems:

Traditional system.

These economic systems existed mainly in the initial periods of human history. Major economic issues were decided on the basis of instinct. Now these systems are much less common (in the most remote regions of the world, in economically weak developed countries).

Traditions, customs, heredity, class, rituals determine what, how and for whom to produce. Consequently, this economic system is based on backward technology, widespread manual labor. Small-scale production is of great importance. It is based on private ownership of productive resources and the personal labor of their owner. Small-scale production is represented by numerous peasant and artisan farms that dominate the economy. The role of the state is active - providing social support to the poorest strata of the population. The natural-communal form of management prevails.

Administrative command system.

The state plays the main role in this system. It is it that decides what, how and for whom to produce with the help of centralized planning and management.

Specific traits:

Public ownership of all economic resources, monopolization of the economy.

The coordination of economic activity is carried out on the basis of a hierarchy, that is, an administrative method of subordination to a higher authority.

The management of the economy is carried out from a single center with the help of orders, direct commands.

The center gives instructions: what, how and for whom to produce, where to deliver the products, in what quantity, at what price. Consequently, the center must know in advance and determine all needs, all resources. On this basis, a directive plan for the development of the economy is drawn up for a certain period of time. Each employee is given specific tasks, and their implementation is strictly monitored.

Giant monopolies do not care about the introduction of new products and technologies.

A significant part of the resources is directed to the development of the military-industrial complex.

Examples of countries: USSR, Eastern European countries.

Practice has shown that such a system can be effective in extreme conditions, in extreme circumstances (war). However, in the long term, in a normal socio-political and economic environment, it cannot be effective. Consequences: the loss of moral and material incentives to work, the loss of a person's sense of the owner, equalization in pay, and therefore a decline in production. The economy is becoming ineffective.

Market system.

The market is a mechanism of interaction between sellers and producers, a balance of supply and demand.

Question "What to produce?" the consumer decides.

Question "How to produce?" is decided by the manufacturer. Under the pressure of competition, manufacturers are trying to innovate in order not to go broke, in order to reduce their costs.

Question "For whom to produce?"- v market system, for those who have money.

Thus, in a market system, the main means of coordinating economic activity is commodity-money relations and competition. Private property is predominant. This is a very tough system. For mistakes you have to pay with the "ruble", since mistakes lead to losses, ruin, bankruptcy. This system is based on the principle of economic feasibility, that is, on the desire to achieve maximum results at minimum costs. In a competitive environment, every entrepreneur tries to produce a better quality product, which means he seeks to introduce new technique and technology. All this contributes to the NTP.

However, this is not an ideal system and it has many disadvantages. As a result of competition, some are ruined and others are enriched, therefore, the property stratification of society grows. Social guarantees are minimal, since the state plays a small role, being only an arbiter who monitors the implementation of laws. Thus, high efficiency is combined with violation of the principles of equality and social justice.

Mixed system.

It should be borne in mind that in real life there is no pure market economy. It only exists in theory. In real life, modern economies in most developed countries are mixed.

The main feature of a mixed economy: both the state and the private sector play an important role in answering the questions: What? How? For whom to produce?

Planning methods are widely used in it: plans for the development of individual firms based on marketing research, specific government intervention. Plans of different economic levels affect the structure and quantity of products produced, ensuring their greater compliance with public needs.

The problem of using resources is solved within large companies also based on the analysis of promising industries.

Thus, the state in a mixed economy acts in many directions, (including financing of new, low-profit industries, retraining of personnel, development of medicine, social protection), influencing the economy, which increases sharply during periods of crises.

However, the market mechanism continues to play the main role in answering the classic three questions.

Farm organization models:

American model- This is a liberal market - capitalist model, which presupposes the priority role of private property, market - competitive mechanism, as well as a high level of social differentiation.

German model- a model of a social market economy, which links the expansion of competitive principles with the creation of a special social infrastructure that mitigates the shortcomings of the market and capital.

Swedish model Is a social model characterized by high level social guarantees based on broad income redistribution.

Japanese model- a model of regulated corporate capitalism, in which favorable opportunities for capital accumulation are coupled with the active role of government regulation in the areas of programming economic development, investment and foreign economic policy and with a special social significance of the intra-firm principle.

1. Read the text and complete the assignments.

The telegraph, as you know, appeared long before the telephone and quickly became a popular means of transmitting information. But few people know that in the 19th century. there was an attempt to make a business in the sale of telegraphs, promoting them to the market as devices for personal household use. Such a business did not take place, since every buyer of the device had to learn Morse code and acquire communication skills in this "inhuman language." The engineer A. Bell, seeing that society needed means of communication, soon invented the telephone, providing a simple and natural way for people to communicate. With the use of the telephone, the communications business expanded rapidly.

(Based on materials from the "Encyclopedia for Schoolchildren")

How in this particular situation were the main issues of the economy solved:

1) What and in what quantity to produce?

V a large number, what the people need and convenient.

2) How to produce?

Economically, with the benefit of yourself and your customers.

3) For whom to produce?

For people.

2. Explain the meaning of the concepts.

Economic efficiency is the ratio between the results obtained by the manufacturer and the cost of labor.

The economic system is a set of organizational methods of coordinating the economic activities of people to solve the main issues of the economy .

3. Name several ways to improve production efficiency.

Optimization of technology, increasing the level of personnel, etc.

4. Fill in the table using the text of the tutorial.

5. Analyze the situation and determine the type of economic system.

1) In country W, the main wealth is land owned by the community. The production process is carried out in accordance with the customs of the ancestors. Families produce everything they need for life on their own farms. Commodity-money relations are not developed.

Traditional economics.

2) In country N, all natural and economic resources are owned by the state. Planning and pricing issues are handled centrally.

Command economy.

6. Compare the market and command economy... Select and write in the first column of the table serial numbers features of their similarities, and in the second column the ordinal numbers of the features of the differences between the market economy and the command economy.

1) domination state form property
2) solving the problem of limited resources
3) production of goods and services
4) competition of commodity producers

7. In the section "The Wise Speak" there is a saying American economist V. Leontyev (see p. 160 of the textbook). Analyze the words of the author.

1) How do you understand the meaning of this statement?

A person, on his own initiative, does and decides for himself where he will be brought. Private initiative is decisive.

2) Write down two or three social science terms with which you can explain the meaning of this statement.

Independent choice, demand, supply.

3) Give some examples to illustrate this statement.

A man opened a store and runs it himself.

"What?", "How?", "For whom?"

In order to solve the main problem of the economy - the distribution of scarce resources, each economic system in its own way answers the following three questions (Fig. 3.2).

Rice. 3.2. Basic questions of the economic system

The traditional economy is based on traditions passed down from generation to generation. These traditions determine what goods and services are produced, for whom and how. The list of goods, production technology and distribution are based on the customs of a given country. The economic roles of members of society are determined by heredity and caste. This type of economy is preserved today in some so-called underdeveloped countries, where technological progress penetrates with great difficulties, since it, as a rule, undermines the customs and traditions established in these systems.

A market economy is characterized by private ownership of resources and the use of a system of markets and prices to coordinate and manage economic activities. What, how and for whom to produce is determined by the market, prices, profits and losses of economic entities.

The manufacturer strives to produce ("what") the products that meet the needs of the buyer and bring him the greatest profit. The consumer decides for himself what product to buy and how much money to pay for it.

Since in conditions of free competition the setting of prices does not depend on the manufacturer, then the question "how?" to produce The business executive responds by striving to produce products at a lower cost than his competitor in order to sell more and at a lower price. The technology and organization of production, the use of technical progress, and various management methods are aimed at solving this problem.

The question "for whom?" is decided in favor of consumers with the highest income.

In such an economic system, the government does not interfere with the economy. Its role is reduced to the protection of private property, the establishment of laws that facilitate the functioning of free markets.

Team or centralized economy is the opposite of a market economy. It is based on state property for all material resources. Hence all economic solutions accepted government bodies through centralized (directive) planning. Each enterprise's production plan provides for what, in what volume to produce; certain resources, equipment, labor force, materials, etc. are allocated, which determines the solution to the issue of how to produce

A mixed economy involves the use of the regulatory role of the state and economic freedom manufacturers. Entrepreneurs and workers move from industry to industry by their own decision, not by government directives. The state carries out antimonopoly, social, fiscal (tax) and other types of economic policy, which to one degree or another contributes to economic growth country and raising the living standards of the population.

Modern world characterized by a wide variety of mixed models. For example, the Swedish system is known, in which the core is social politics... The Japanese model of the economy is characterized by a developed indicative (recommendatory) planning and coordination of the activities of the government and the private sector.

In the American economy, the state plays an important role in establishing the rules of economic activity, regulating business, and developing education and science. But most decisions are made based on the market situation and pricing.

The modern world is characterized by the presence of a variety of economic systems, for the classification of which different criteria are used. Formational and civilizational approaches are best known today.

The formation approach made it possible to identify regular steps in the historical development of society and identify five ways material production(primitive, slave, feudal, capitalist and communist) on the basis of the assertion that the decisive role belongs to the direct process of production, or the mode of production.

It is interesting to note that K. Marx, in his letter to Vera Zasulich, singled out only three large formations:

1) primary (archaic), where he attributed the primitive and Asian modes of production;

2) secondary, based on private property (slavery, serfdom, capitalism);

3) communist. According to Marx, communism is not an "ideal mode of production", as many imagined, but a historical era, which includes a number of modes of production, the main content of which is the destruction of private property. The communist ideal, according to Marx - "The free development of everyone is a condition for the free development of all" - was realized only after the end of the era of communism in the new era of "positive humanism". According to K. Marx, F. Engels, and then V.I. Lenin, communism consists of two phases, the lowest of which is socialism.

In connection with the events taking place in our country and the countries of Eastern Europe, questions arose: is the teaching of Marxism about the socialist transformation of society true and is not the communist idea itself a utopia? Today, everyone answers these questions differently. Some believe that socialism in the former socialist countries, in fact, did not exist, rather, socialism was in Western developed countries, so they say, for example, about the model of "Swedish socialism". Others argue that there was socialism, there was also a world socialist system, but the socialist economic system was significantly deformed. At present, in world practice, journalism and economic literature, one can increasingly come across the term "post-communist" or "post-socialist" countries, which testifies to the recognition of the existence of socialism in these countries until the recent past.

Today, the classical identification of five modes of production is questionable for a number of reasons, including because it is applicable only to Western Europe and does not have universal significance. The Asian mode of production, the civilization of China and India does not fit here, with a big stretch it is possible to include Russia here. Therefore, consideration of the processes of world development at the level of formation, the method of material production, with all its theoretical and historical significance, cannot cover the entire complex range of events taking place in the world. The certain limitations of this approach are obvious. Therefore, in the economic literature, attempts are made to use other criteria for analyzing the phenomena and processes of social life.

The theory of the cyclical development of society, the change of civilization, is of undoubted interest in explaining various forms of economic systems.

According to this theory, seven civilizations are distinguished: Neolithic, the duration of which is 30-35 centuries, and in Russia 20-30 centuries; Eastern slaveholding (Bronze Age) - with a duration in the world of 20-23 centuries, in Russia - 15-16; antique (Iron Age) - 12-13 centuries in the world and 11-12 centuries in Russia; early feudal - 7 and 7 centuries, respectively; preindustrial - 4.5 and 2.5 centuries; industrial - 2.3 and 1.5 centuries; postindustrial - 1.3 and 1.4. The change of civilizations can be represented graphically (Fig. 3.3).

Rice. 3.3. Change of civilizations in the world

This theory allows us to take a fresh look at the processes taking place today in the world in general and in Russia in particular. It allows us to draw the following conclusions.

1. Since the market took place in all civilizations (although its role was different), the essence of the modern transition period is not reduced to the transition to the market (it is impossible to move from the market to the market), but to the replacement of one civilization by another. The statement about the modern transition of Russia to the krynku testifies to the fact that we are in captivity of primitive stereotypes, cliches, according to which it was believed that socialism (including that built in Russia) is incompatible with the market, the plan and the market are antipodes, etc.

2. The duration of the transition economy, if it is understood as a stage of crisis and displacement of the outgoing and birth of a new civilization, according to the calculations of the Leningrad economists V.I. Kuzmina and A.V. Zhirmunsky, is 1/4 of the total duration of the cycle, therefore, Russia will enter a new civilization approximately in 2010.

3. Due to the fact that Russia later entered this or that civilization, but passed them much faster, it can be assumed that the peoples of Russia perceive progress faster than it is customary to think. It is wrong to represent the peoples of Russia as lazy, worthless and inert people. The evolution of civilizations shows the opposite.

In the economic literature, views on the development trends of economic (economic) systems are different. Some believe that the defining trend in the development of systems is the tendency towards uniformity, unification of all structural elements. So, E. Preobrazhensky wrote that various systems management can exist within the framework of the national economy on the basis of complete economic equilibrium between them, but such an equilibrium cannot exist for a long time, because one system must devour the other.

Other economists believe that the coexistence of different economic systems mutually enriches these systems, and this leads to economic growth and the emergence of a qualitatively new economic system. Thus, N. Bukharin found the deepest meaning of NEP in the fact that for the first time the possibility of mutual fertilization of different economic forces was discovered, on the basis of which growth was ensured. The modern theory of convergence is based on the thesis that different economic systems in the process of their own development and improvement will ultimately merge and create a new economic system.

Such inconsistency of views reflects the inconsistency of the development of economic systems, when one trend replaces another. Modern development many countries confirms this theoretical conclusion: general nationalization is replaced by denationalization; general planning - by rejecting it; centralization - decentralization, etc. The stronger the fluctuations, the greater the difficulties in the development of the country's economy.

Institutionalists are interested in two main problems: economic power and control over the economy, in connection with which they use the concept of "institutions".

Economic institutions are usually understood as the rules of the game in society or, more formally, human-created constraints that shape human interaction.

Institutions create a structure of incentives for exchange, public, political or economic. Institutions are both formal laws (constitutions, legislation, property rights) and informal rules (traditions, customs, codes of conduct). Institutions were created by humans with the aim of enforcing order and eliminating uncertainty in exchange. Such institutions, together with the standard constraints adopted in the economy, determined a set of alternatives and thus determined the costs of production and circulation and, accordingly, the profitability and likelihood of being attracted to economic activity. Jack Knight believes that institutions are a set of rules that structure social relationships in a special way, the knowledge of which all members of a given community should have.

Formal institutions are often created to serve the interests of those who control institutional change in market economy... The pursuit of their own interests can have a negative effect on others.

Social institutions that fulfill ideological and spiritual needs often influence public organizations and economic behavior. Attempts by the state to manipulate public institutions, for example, norms, for their own purposes have often been unsuccessful. An example is the education of Soviet people in the spirit of the moral code of the builder of communism.

Institutions can be viewed as social capital that can change through depreciation and new investment. Formal laws can change quickly, but coercion and informal rules change slowly. And here Russia can serve as an example, adapting for market model suitable economic institutions of capitalism. Informal rules, norms, customs are not created by the authorities, they often develop spontaneously.

Institutions are slow to adapt to changes in their environment, therefore, institutions that were effective become ineffective and remain so for a long time, since it is difficult to turn society from the historical path established long ago.

There is a difference between institutions and organizations. While institutions are the set of rules and laws that govern interactions, actions individuals, organizations are corporate actors who can themselves be subject to institutional constraints. Organizations have internal structure, the institutional framework that defines _ the interaction of the individuals that make up the organization. Some collective associations can thus be both institutions and organizations, such as a firm, government bureaucracy, church, or educational institution.

To understand the relationship between institutions and production efficiency, the concept of transaction costs is essential. The term transaction costs was introduced into scientific circulation by the Nobel laureate R. Coase (b. 1910). These costs are associated not with production as such, but with the accompanying costs: searching for information on prices, counterparties of business transactions, the costs of concluding business contracts, monitoring their execution, etc.

In modern Western societies, systems of contractual law, mutual obligations, guarantees, trade marks, complex monitoring systems and effective mechanisms for enforcing laws have already developed. As a result of all of this, servicing transactions consumes enormous resources (although these costs are small per transaction), but the productivity associated with gaining from trade increases even more, thanks to which Western societies have been able to grow and develop rapidly.

Increasing specialization and division of labor necessitate the development of institutional structures that allow people to take actions based on complex relationships with other people - complex both in terms of individual knowledge and in terms of temporal extent. Development of a complex network of social relationships would be would not be possible if such institutional structures did not reduce the uncertainty associated with such situations.Institutional robustness is of fundamental importance, because it means that, despite the constant expansion of the network of interdependence due to the growth of specialization, we can be confident in the results that inevitably become all more and more distant from the circle of our individual knowledge.

High transaction costs are very often associated with weak institutions (weak public enforcement in enforcing laws), but high transaction costs can also be associated with strong institutions that leave little rights to agents. The main goal in choosing institutions is to minimize transaction costs. Voluntary exchange will be based on more trust if the government minimizes transaction costs by creating and clarifying property rights.

The effectiveness of coordination methods must be considered not from the point of view of normative assessments (good or bad), but from the point of view of saving transaction costs. Of course, this is not the only criterion, but it helps to understand why the attempt to build all social production according to the type of a firm or "a single factory", as Lenin wrote, turned out to be untenable. For regulation from the center (State Planning Commission) is accompanied by huge transaction costs due to the impossibility of concentrating all the information scattered in society about resources, consumer preferences, etc. in a single center.

1. A specially ordered system of relations between producers and consumers of material and non-material goods and services constitutes the economic system. At the same time, the economic system is a set of mechanisms and institutions for making and implementing decisions in economic activity.

2. The most important elements of the economic system are economic activity, productive forces, production relations, economic resources, production capabilities, results and efficiency.

3. Due to the limited economic resources, the most important problem of the economic system is the problem of choice. The essence of this problem is that if each economic resource used to meet diverse needs is limited, then there is always the problem of alternative use and the search for the best combination of rare resources. What we give up is called the opportunity cost of the expressed result.

4. The production capabilities of the economic system, limited by the scarcity of resources used, as society develops, does not

IOiibKU are not saved, but they can grow. The production capacity of an economic system is characterized by the production capacity curve.

5. Economic efficiency is the ratio of results and costs and economic activity. The result is an economic product, and costs are the expended economic resources. Economic efficiency characterizes the Pareto optimum - this is a state in which no one can improve their condition without worsening the position of at least one of the market participants.