Department of Management

Information Systems
University of Dhaka

Assignment: Advantages and Limitations of

Different Economic Systems
Course Title: Microeconomics
Course code: 107

SUBMITTED TO:-

MD. Ariful Islam

Assistant Professor
MIS,DU
SUBMITTED BY:-

Rashedul Islam
Roll: 029-15-087
Section: A
BBA 1 st Semester

Dateline:24/12/2020
An economic system is a system of organization or institution which is concerned
with the production, pricing, and distribution of resources. There are four economic
systems we will discuss, are:-

1. Planned economy
2. Market economy
3. Mixed economy
4. Islamic economy

Planned Economy:-
A planned economy is an economic system in which the allocations of resources are
centrally planned.

Advantages:
1) The allocation of resources are centrally planned
2) Less inequality of wealth
3) Distribution resources are improved
4) Prices are kept under control
5) The Government gives job to unemployed thus the employment rate
increase

Disadvantages:
1) No chance to make own profit
2) Consumers receive a complete lack of choice
3) No motivation for innovation works
4) There is rarely any chance to oppose the decisions made by Government
5) Lack of freedom

Market Economy:-
A planned economy is an economic system in which the allocations of resources are
created by the forces of supply and demand.

Advantages:
1) Have freedom for making own decisions and regulations
2) Efficiency level increased because of competition between firms
3) Get motivation for working hard
4) There is more innovation
5) A great varieties of consumer goods
Disadvantages:
1) Overproduction of goods
2) Unused industrial capacity
3) The unemployment rate is higher
4) Income and wealth inequality
5) The number of economic crimes get high because people trying to make more
money illegally

Mixed Economy:-
A mixed economy is an economy system that combines both planned and market
economy.

Advantages:
1) There is a balance on freedom and equity
2) Regulation on the abuse of monopoly power
3) Reduce the number of government interference
4) They have a profit incentive to cut costs and be innovative
5) The government takes the liability of the market

Disadvantages:
1) Allowing too much market forces
2) Allowing too much government intervention
3) It is difficult to measure the number of government interference
4) Criticized by socialists

Islamic Economy:-
A planned economy is an economic system in which the allocations of resources are
created by in the light of the Qur’an and the Sunnah.

Advantages:
1) Having a captive market
2) The corruption level is low
3) Haram products are totally banned
4) All classes of people are benefited
5) Poverty reduction

Disadvantages:
1) Improper utilization of Zakat funds
2) Lack of innovation