Question: What helps the manufacturer to rationally solve the main issues of the economy? What helps the manufacturer to rationally solve the main issues of the economy? What is the principle of the "invisible hand" of the market? What helps the manufacturer rationally.

How do costs and benefits compare?

Remember: What is profitable and for whom? Who can be called a rational producer? Where are the limits of economic freedom?

Should production be regulated? Limitation economic resources on the planet gives rise to the need for man to solve the problem of their rational use and distribution. From the previous paragraph, you learned that all those who make economic decisions have to constantly make economic choices: households, firms, the state. Any society, regardless of the level of well-being, must be able to determine what goods, how and for whom to produce. These three questions of the organization of the economy are decisive for. development of society. Let's consider them in more detail.

What to produce? Which of the possible goods and services should be produced at a given time? An individual can provide himself with the necessary goods in various ways: produce them on his own, exchange them for other goods, receive them as a gift. Society as a whole cannot increase production all goods and services at the same time. He has to make a rather difficult choice: what he would like to receive immediately, with which he can wait or refuse something altogether. Firms, individual entrepreneurs constantly make decisions about what goods and services should be produced using the resources available and at their disposal and offered to the consumer.

So, the essence of the problem is that resources are limited and the economy cannot provide an unlimited output of goods and services. Therefore, it is necessary to make decisions about which goods and services should be produced and which should be abandoned. (Give examples of such decisions by economic participants.)

How to produce? The solution of this issue is connected with the choice of economic resources, technology, location of the enterprise, organization of production, etc.

Exist various options production of goods. Of the many options, it is important to choose the most effective. So, there are always several ways to build roads, make cars, develop new mineral deposits. One method requires large financial outlays, the other - technical, the third - a significant use of labor resources, etc. Which option for combining the resources necessary for production is optimal? When solving this issue, the economic efficiency of the project is taken into account first of all.

Economic efficiency means obtaining a given volume of output at the lowest cost of limited resources. More output from a given amount of input means more efficiency, and vice versa. From the social science course of grade 7, you know the relationship between the amount of production resources and the quantity and quality of the product produced. Recall that the manufacturer, solving the problem of "costs - output", seeks to find the best ways to combine resources and organize their production. Thus, the following methods help the manufacturer to use resources efficiently and reduce costs: the introduction of technical innovations and new technologies, the economical and careful use of resources, the improvement of the worker's skills, and the use of the division of labor.

Thus, society as a whole and individual producers must decide: by whom, from what resources and with the help of what technology, goods should be produced, how should production be organized?

Who is the product for? Who will be able to purchase goods and services and how are they distributed among members of society?

Since no society is able to provide everyone who wants, for example, their own cottage or car, one has to put up with the fact that someone lives in apartment building or enjoys public transport. Society is forced to orient producers to a specific consumer of economic goods. Manufacturer takes into account the needs for goods and services of various groups of the population with different incomes and decides for whom to produce: for the rich (luxury goods), for the mass consumer or for the poor (cheap goods).

A watch manufacturer can produce wristwatches in a simple metal case or in gold, ordinary mechanical alarm clocks or sophisticated electronic ones. His choice will depend, in particular, on the solution of the question of who will use the products produced. Thus, the problem of the distribution of economic benefits is also solved through choice.

All of the above main economic issues are based on choice and are decided by participants in the economy in close interconnection.

Economic system and its functions. We have already touched on how people make choices when resources are limited. In order for the economy of any country to work normally, it is necessary to find a way to coordinate this choice of millions of people.

A variety of ways to coordinate economic life and make decisions on major economic issues depends on the dominant form of ownership in society (who has access to economic resources), methods of making economic decisions on the organization of production and distribution of benefits (spontaneously with the help of orders, commands), as well as methods notes of people to economic activities (incentives and motives for participation in activities).

In the most general form, I should name three ways for society to solve the main issues of the economy: according to long-established customs (tradition); by issuing instructions and orders "from top to bottom" (by command methods); with the help of the market. Let's take a closer look at them later.

The development of society has shown the possibility of the existence of several options for organizing economic life. They are called economic systems.

The economic system is a set of organizational methods for coordinating the economic activities of people to resolve the issues: what, how and for whom to produce?

Economists distinguish the following main types of economic systems: traditional, centralized (command), market. Each of them is looking for its own approaches to solving the main economic issues and ways of distributing limited resources. However, such a separation of economic systems is quite simple. In real life, it is difficult to find a state with a purely pronounced type of economic system. The economic systems operating in the world use various combinations of the above methods of organizing economic life.

Types of economic systems. The economic activity of people carried out in a particular economic system has its own characteristics. Consider them on the example of the main types of economy.

Traditional economy- economic system, which customs and traditions determine the practice of using scarce resources. It is based on the widespread use of manual labor, backward technology, communal farming, barter in kind. The main economic issues are resolved and in accordance with customs and traditions (everything is done as before).

Inhabitants of the African jungle or the islands of the southern moraines, the Canadian Eskimos conduct economic affairs on the basis of centuries-old traditions passed down from generation to generation. Economic resources in traditional economy are most often collectively owned by a tribe or community. The decision to use community resources is made collectively.

The set of produced economic goods is not diverse. The same is true for certain types activities (mainly work in agriculture, crafts). Technologies and methods of production in the traditional economy do not change for centuries, which hinders the development of the economy and the growth of production efficiency. Such an economic system, despite its stable, predictable nature, is capable of satisfying only the minimum, vital needs of people.

At present, the traditional economic system has been preserved in its pure form among some tribes of Central Africa, South and Southeast Asia. Separate elements of such an economy can be found in a number of underdeveloped and developing countries. For example, in some states of India, semi-subsistence farming is maintained.

(Think about whether there are any aspects of economic life in modern Russian society that are regulated by traditions and customs.)

Market economy- a way of organizing economic life, based on a variety of forms of ownership, entrepreneurship and competition, free pricing. In this economic system, deciding what to produce, how and for whom is the result of the interaction of sellers and buyers in the market. In an economic sense, a market is a collection economic relations, manifested in the sphere of exchange, as well as the conditions by which sellers and buyers find each other and can make transactions.

In a market economy, the main resources of production and its results are in the hands of private individuals. People operating in this economy are free from the power of customs and orders "from above". Everyone independently makes economic decisions in accordance with their own interests and needs. The consumer makes a purchase decision based on the desire to get more benefit from the consumption of the product. The producer, deciding to produce this or that product, expects to make a profit. Therefore, the question "what to produce?" in a market economy there is one answer: only those goods that can bring profit will be produced, and those goods whose production entails losses will not be produced. At the same time, the manufacturer seeks to choose such a production technology that will provide him with the greatest profit. In a market economy, production is carried out only by those firms that are willing and able to apply new technology production. The use of new technologies ensures the growth of economic efficiency as a result of lower production costs. Thus, the market economic system favors technological progress.

If each participant in the economy acts in his own interests, then how is the problem of a fair distribution of benefits solved? The purchase by consumers of the manufactured product depends on the amount of their monetary income and the prices of goods and services. The higher the income of the consumer, the greater the share of the product he will be able to purchase. The lower the price of a product, the more it is consumed, and vice versa. It is the prices that are freely formed in the process of buying and selling that answer the questions: what, how and for whom to produce? How the market works, how prices contribute to the efficient distribution and use of economic resources, you will learn in detail in subsequent lessons.

Opinions. Economists are seriously arguing about the effectiveness of the market economy: on the one hand, it promotes the rational allocation of resources and personal freedom, and on the other hand, it is not efficient enough. The so-called "market miscalculations" include unemployment, excessive inequality in the incomes of the population. economic instability and etc.

command economy an economic system in which the main economic decisions are made by the state acting as the organizer of the economic activity of the society. It is characterized by state ownership of the means of production, centralized planning of production, distribution and consumption of material goods.

All economic and Natural resources are owned by the state. Therefore, what, how and for whom to produce, the state plans from a single center on the basis of orders (directives), laws, planning targets. The state controls and regulates the production and distribution of basic goods. Such an economic system existed in the USSR and other socialist countries. A single economic center tried to take into account all needs - from public to individual, to provide for all the emerging problems associated with their satisfaction (Think about whether it is possible to draw up an ideal plan for the development of the economy of the whole country. What could prevent this?)

The result of such planning was often the insufficiency of some goods (your parents still remember numerous queues) or an excess of others, delays due to complex administrative procedures in the introduction of new technologies into production and new equipment into the life of the population.

Producers, excluded from independent economic decisions, turned into executors of other people's orders. They were not interested in the results of their activities, since a significant part of the income was transferred to the state. This caused a decrease in labor productivity and overall efficiency. social production. As a result, there is a low level of satisfaction of people's needs for goods and services. This is one of the reasons for the collapse of the command economy in our country and the narrowing of the circle of countries in the world that maintain this type of economy. Currently, the command economy operates in Cuba, North Korea, and some countries in Southeast and Central Asia.

The modern economy of most countries is mixed. It is based on the market, but various forms of state regulation are used, private property and state property interact. A mixed economy is a modern economy in which both the market and the state play an active role.

Document. The Russian scientist-economist, Doctor of Economics E. N. Lobacheva characterizes the type of economy under consideration as follows:

"AT modern conditions the most widespread economic system should obviously be recognized as a mixed economy. It is characterized by: a developed market, economic freedom, and therefore a variety of entrepreneurial activities of wide strata working-age population and the active regulatory role of the state... This allows you to realize the possibilities of a market economy to improve production efficiency, and through state regulation orient the country towards the rational and fuller use of limited resources, the use of safe technologies and the preservation of the environment. A sufficiently long period of functioning of reasonable models of a mixed economy shows that a state-regulated market economy is able to ensure the economic, scientific and technological development of the country and provide sufficiently high social guarantees to its citizens.

Ratio economic role state and market in the management of the economy is seriously different in modern developed countries. Thus, in the United States, about 4/5 of the total volume of production produced in the country is provided by market system. The Japanese economy is characterized by state planning and coordination of economic activities of the government and the private sector.

So, the economic system contributes to the solution of the problem effective use limited resources. The main task of the economic system is to bring into line the unlimited needs and limited possibilities of the members of society through the solution of questions: what, how and for whom to produce?

check yourself

1. How to resolve the contradiction between the limited resources and the growing needs of people?

2. What is economic efficiency?

3. What is the difference in the ways of coordinating economic choice in different economic systems?

4. What are the features of the functioning of the main economic systems?

In class and at home

1. Read the text below with missing words.

In a market economy, the resources of production and its result - the product - do not belong to the community, as in -, and not to the state, as in - but private

persons. Therefore, the problem of incentives for production in a market economy is not worth it. Each manufacturer chooses the most profitable product for himself and produces it in order to get the result -. He also chooses, if possible, the most efficient - production, in which the ratio of result to cost is the largest. The market economy is based on entrepreneurship and private -. Historical experience has shown the advantage of a market economy over others.

Choose from the list below what needs to be inserted and write it down in a notebook (The words are given in the nominative case; there are more words in the list than you need to choose): 1) command economy; 2) traditional economy; structure; 4) profit; 5) trade; 6) technology; 7) revenue; 8) economic system.

2. Using knowledge of the history of Russia, determine the signs of which economic systems characterize the economy of the era of Peter I. Give the necessary examples.

3. Fill in the table in your notebook.

Market economy	command economy	Traditional economy

Write the listed features of a particular economic system in the appropriate column of the table: the dominance of natural economy; economic independence of producers; control over the distribution of benefits by the state; dominance of state property; "simple labor" as the basis of the economy; equal rights for all forms of ownership: the adoption of state plans, mandatory l whether productive; production of products primarily for own consumption; support by the state of a stable price level; isolation of the economy; centralized redistribution of economic resources; usage production resources based on custom.

Why can't we always buy what we want?
What is profitable and for whom?
How to win in competition?
Market: evil or good for society?

Needs and Resources: The Problem of Choice. In the first chapter of the textbook, you got acquainted with the diverse needs of a person: material, social, spiritual. Now let's try together to figure out what is needed to satisfy them and how the economy is involved in this.

To sew a suit, you need fabric. To build a house, materials are needed: wood, cement, machinery. To produce gasoline for a car, you need oil. All this is called resources (from the French ressourse - an auxiliary tool).

Resources in the economy are limited, and examples of this are all around us: forests, water sources, mineral reserves, etc. By studying the interaction between nature and man, you have already become familiar with the problem of limited natural resources. This determines the need for their careful, skillful use, reasonable organization of human economic activity.

The limited nature of certain resources forces one to choose options for their use. For example, you probably remember about the limited financial resources every time you go to the store. You would like to buy both a new tape recorder and a new jacket, but you can afford to buy one. You might be able to shop for a less fashionable jacket and a cheap tape recorder, but in this case, you're sacrificing quality in exchange for being able to get both.

Each person solves the problem of economic choice in his own way, but, as a rule, he strives to act rationally (from Latin ratio - reason; rationis - measure, calculation), i.e. reasonably, prudently. In economics, this involves choosing the option that seems best to a person, brings him more benefits compared to costs.

So, human needs always outstrip the possibilities. This contradiction gives rise to the difficult problem of choice. How to spend the limited funds available? What needs to be met first? How can we make the best use of what we have? The problem of distribution of limited resources is the main problem of the economy.

Factors of production. In order to live and satisfy our needs, we need economic activity that allows us to turn resources into economic goods, i.e., items that satisfy one or another human need (food, clothes, cars, books, etc.). For the production of goods, a combination of nature, man, and technology is necessary.

The main groups of resources used in the production process are called factors of production (from the Latin factor - making, producing; a factor is the cause, the driving force of a process, a phenomenon that determines its nature or its individual features). These include land, labor, capital, entrepreneurial ability. In the second half of the XX century. one more source of wealth became obvious - information. "He who owns the information owns the world." Hence the increased attention now to this resource.

Earth- these are natural resources used in production: the land itself (arable land, location production facilities), minerals, forests, water and air, flora and fauna of nature.

Work- this is the labor force involved in the production, the so-called "human capital": abilities and skills, health, education, qualifications of workers.

Capital as a factor of production- these are the means of production created by people: buildings and structures, machines and tools, equipment.

Entrepreneurial ability is a factor that binds together the other factors of production. It allows the best use of resources in order to obtain high results (more products and better quality). This is a combination of energetic activity of entrepreneurs, their organizational and economic innovation (search and implementation of new ideas, technologies, approaches) and willingness to take risks when organizing a new business.

Information(from Latin informatio - explanation, presentation) - a resource used in economic processes. As a product of mental activity, information is, first of all, knowledge, information, messages, data used in the process of analyzing and making economic decisions, in management, etc. Information is so important in a modern society that is experiencing an information revolution, a resource that, in the opinion economists deserves a special place among the factors of production.

The main questions of the economy. The limited economic resources on the planet and the need for a person to solve the problem of their distribution gives rise to three main questions of the economy: what, how and for whom to produce.

What needs to be produced, i.e. what goods and services should be offered to the consumer. How to produce, i.e. what ways to get the desired result. For whom should produce these goods and services, i.e., who will be able to purchase them.

Every manufacturer and society as a whole have tried to find answers to these questions at all times.

Under subsistence farming, people could live independently of each other. With the division of labor, the exchange of products between producers became necessary. Who will specialize in the production of, for example, pottery, being not very sure that it will be possible to exchange it for clothes, food and other necessary goods. Such dependence between producers requires coordination of their activities. And the method of regulating the activities of producers in the conditions of the division of labor is called the economic system.

There are the following types of economic systems: traditional, centralized (command) and market. They are distinguished by different approaches to solving the main issues of the economy: what, how and for whom to produce. So, in a traditional economy, these problems are solved on the basis of customs and traditions (do everything as before), in a centralized economy, with the help of a plan established by the state, and in a market economy, on the basis of the personal interests of free producers who seek to produce goods that are in demand for market and make a profit for them.

A product produced by a free producer for exchange is called a commodity. Remember that at different times a special intermediary commodity was used for exchange: cattle, animal skins, salt, even sea shells. It was the first so-called commodity money.

Money- this is a commodity by which the value of other goods is measured, a purchase is paid for, gradually the role of money began to be played by precious metals: gold and silver. Currently, money is special papers and coins issued by central bank each state.

The exchange of goods for other goods or money takes place in the market (the market is not a place for exchange and conclusion of commercial transactions, but in the scientific sense of the word). In the economic sense, the market is a system of economic relations associated with the exchange, a set of conditions due to which sellers and buyers find each other and can make transactions.

An economic system in which the solution of the question of what, how and for whom to produce is the result of the interaction of sellers and buyers in the market and is called a market economy. Let's use it as an example of how individual producers solve the main issues of the economy.

The "invisible hand" of the market. The market as a general principle of organizing the country's economic life has the following character traits: free exchange between sellers and buyers, stimulated by the benefits of the transaction; real financial responsibility of market exchange participants (sellers and buyers spend their money and risk it); competition between producers (sellers) of goods and services for consumers (buyers) of their products. Since competition plays a very important role in a market economy, we will dwell on it in more detail.

Competition- rivalry, struggle for achievement of the best results in any business. The word "show jumping" denotes a special type of equestrian competition - overcoming various obstacles. More familiar to you the word "competition" - competition, rivalry for the achievement of certain advantages. Remember, competition, the struggle between producers of goods and services has already existed from the first steps in the development of commodity production. Each manufacturer sought to quickly sell their product on the market and make a profit on the money invested. In a market economy, sellers of goods and services compete with each other, trying to attract as many buyers as possible. To do this, they reduce prices, improve the quality of goods.

Competition encourages manufacturers to improve their products, to look for the most rational ways to obtain and use limited resources for their manufacture.

Despite the fact that the producer solves the main issues of the economy at his own peril and risk, that is, freely and independently, chaos and anarchy do not reign in society. Why? The fact is that in market conditions, the manufacturer is subject to a very influential force - the dictatorship of prices.

To understand how market prices tell the manufacturer what, how and for whom to produce, let's get acquainted with the concepts of "demand" and "supply".

Demand- this is the desire and ability of the consumer to buy a specific product or receive a service at a specific time and in a specific place. The basis of demand is needs, but limited by the buyer's solvency, i.e., the amount of funds that he can allocate from his income to purchase a particular product or service. Demand is inversely related to price. The higher the unit price of a good, the lower the demand for that good.

Sentence- this is the desire and ability of sellers to sell a specific product at a specific time and in a specific place. The supply is directly dependent on the price: the higher the price per unit of goods, the more goods producers are willing to produce and sell.

The situation on the market, when the seller can and wants to sell exactly as much goods and at the same price as the buyer wants and can buy for this price, economists call the market equilibrium, and the price at which the real deal is concluded is the equilibrium price. The equilibrium price is not just a condition for the sale of goods, it becomes an important guide for producers, telling them what and at what prices can be bought on the market and what, therefore, can be produced.

The price determined by the demand for a product is not the only signal for the producer to choose what to produce. Another signal is the profitability of the product. He chooses to release those goods for which the excess of revenue over the cost of its production, called profit, will be the largest.

The main principle of the market is that the transaction should be profitable for both the seller and the buyer..

Thanks to this, all people (and hence the whole society) achieve the best result for themselves, the resources of society are distributed in the most rational way. The situation, when all market participants strive to ensure the improvement of the welfare of all, as each seller and each buyer seeks to satisfy a personal interest in his welfare, the great English economist Adam Smith called the "invisible hand" of the market. It is she who makes everyone think about the interests of others, because otherwise the manufacturer's goods may turn out to be unnecessary and, instead of profit, bring losses. The "invisible hand" of the market directs the desires of individual producers for the common good.

Let's see how the interaction of supply and demand helps answer the question of how to produce, what technologies and methods of production to apply. To get more profit, the manufacturer needs to reduce production costs, so he introduces a savings mode, introduces new equipment.

Finally, the market answers the question for whom to produce or how goods and services are distributed. They are distributed by the market among those who want to buy them on the sole basis - the availability of money for the purchase. And if there are not enough goods, then the one who can pay the most gets them. This is what manufacturers will prefer in an effort to get the greatest benefit.

Basic concepts

Economic system, market economy, market, factors of production, competition, demand, supply.

Terms

Economic benefits, resources, equilibrium price, money.

Questions for self-examination

Why is a person forced to choose how to use resources to meet their needs?
Which economic system provides a more efficient allocation of scarce resources, and why?
What helps the manufacturer to rationally solve the main issues of the economy? What is the principle of invisible hand» the market?
What are the characteristics of a market economy?

Tasks

Explain how you understand the following statement by J. Bernard Shaw: "Economy is the ability to make the best use of life."
Prove that limited resources are the main problem of any society, country.
Explain how the market ensures the efficient allocation of scarce resources. What is the principle of the "invisible hand" of the market?
Specify the signs of a market economy. Find one wrong answer:
1. producer competition;
2. free pricing;
3. centralized price setting by the state;
4. producer autonomy.
Most of humanity prefers the market way of managing. Try to find arguments in favor of this choice.

1. Why is a person forced to choose ways to use resources to meet their needs?
2. Which economic system provides a more efficient allocation of limited resources and why?
3. What helps the manufacturer to rationally solve the main issues of the economy? What is the principle of the "invisible hand" of the market?
4. What are the characteristics of a market economy?

what are the market conditions?

Why is competition considered the main driver of a market economy?

What influences supply and demand in the market?

How do producers in the market solve the main issues of the economy?

What is the mechanism for establishing an equilibrium price?

What is the principle of the "invisible hand" of the market?

Sometimes start-up entrepreneurs fail in their attempts to organize a profitable business. It may turn out that their proposals do not suit the market

either in quality, or in content, or there are far more such proposals than the need for them. Sometimes seemingly completely innovative ideas and inventions do not resonate with people because their application does not simplify, but, on the contrary, complicates life. 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 of selling telegraph machines, promoting them to the market as devices for personal household use. Such a business did not take place, since each buyer of the device had to learn Morse code and acquire communication skills in this "non-human language". Engineer 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 began to expand rapidly.

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

1) What and how much to produce?

2) How to produce?

3) For whom to produce?

1 Complete the phrase. “The process of depreciation of money, which manifests itself in the form of a long-term increase in the prices of goods and services,

called... "

Below are some terms. All of them, with the exception of
one, refer to the concept of "consumption". Find and
indicate the term that falls out of the general series and refers to
to other characteristics of the economic life of society.

Product, living wage, specialization, purchasing power, demand, service.

. Read the text and answer the questions.

Since no conceivable center can always be aware of all the circumstances of the constantly changing supply and demand for various goods and quickly bring this information to the attention of interested parties, some mechanism is needed that automatically registers all significant consequences of individual actions and expresses them in a universal a form that would be both the result of past and a guide for future individual decisions.

The price system is such a mechanism under competitive conditions, and no other mechanism can replace it. By observing the movement of a relatively small number of prices, as an engineer observes the movement of the arrows of instruments, the entrepreneur is able to coordinate his actions with others. It is essential that this function of the price system is realized only in conditions of competition, i.e. only if the individual entrepreneur must take into account price movements, but cannot control them.

Questions and tasks: 1. How do individual producers coordinate their actions with the actions of others in a competitive environment? 2. Why do you think the scientist calls the market price of the goods "the result of past and a guide for future individual decisions" of producers? 3. Describe the meaning and role of the equilibrium (market) price in the implementation of the principle of the "invisible hand" of the market.

What helps the manufacturer to rationally solve the main issues of the economy? What is the principle of the "invisible hand" of the market?

Answers:

The ability of the market to independently regulate the distribution of scarce resources and provide reliable information to buyers and sellers, the eminent economist Adam Smith called "the invisible hand of providence. The buyer does not know either the seller or the manufacturer, the seller does not know his buyer. But both of them are controlled by the "invisible hand", ensuring the welfare of all as each of the sellers and buyers ensures their own well-being. That is, the desire for the well-being of each leads to the wealth of society as a whole. And this is the principle of the Italian economist William Pereto)

Goals for students:

Determine the role of the state in the development of the economy;
Determine the role and types of taxes in the country's economy;
Determine the role of the state budget in the country's economy;
Determine the goals of the task of the state in the economic sphere.

Checking d / z:

Test;
Questions to §19.

1. Production is ...

a) The process of human impact on the substance of nature in order to create material benefits necessary for the existence and development of society;
b) the activities of people in enterprises that create material wealth;
c) the process of including employees in labor relations regarding the creation of a product.

2. A leap in the development of productive forces, consisting in the transition of manufactory to machine production, is ...

a) Scientific and technological progress;
b) Scientific and technological revolution;
c) Industrial revolution.

3. A product is…

a) Everything that is sold on the market;
b) The product of labor offered for exchange through purchase and sale;
c) A thing of high quality.

4. Economy is...

a) The art of housekeeping;
b) Organization of the economy on a territorial basis;
c) Rational distribution of limited goods;

5. Inflation is…

a) an increase in the general price level;
b) a fall in the value and purchasing power of money;
c) rising cost of living;

Answers:

1. a
2. in
3. b
4. a
5. a, b

Questions for §19

1. Why is a person forced to choose ways to use resources to meet their needs?
2. Which economic system provides a more efficient allocation of limited resources and why?

Questions for §19

3. What helps the manufacturer to rationally solve the main issues of the economy?
4. What is the principle of the "invisible hand" of the market?
5. What are the characteristics of a market economy?

Learning new material

PLAN:
1. Why does the economy need a state?
2. Tax system.
3. State budget.

Government functions according to A. Smith

Ensuring national defense;
Definitions of justice;
Organization of public works, unprofitable for private entrepreneurship, but necessary for citizens;
Collection of taxes to pay for the needs of the state.