MARKET AND ECONOMY

STRATEGIES VS ENVIRONMENT
Environmental Studies Assignment 1

SUBMITTED BY-
Vishal Singh (BBA/2K18/117)
Economic systems are the means that are adopted by governments of
respective countries for distribution of resources along with services
and goods.
Such an arrangement is dependent on production factors such as
capital, labour, physical resources, entrepreneurs and information
resources.

Traditional Economic System-

This economic system retains essential characteristics in which there is
a very less specialization or division of labour.
A Traditional Economy is most likely to be found in rural settings or
in such developing countries where farming is predominant. Such
settings usually have very few resources to share.
Historically, traditionally economies date all the way back to Cro-
Magnon man, in fact, to the beginning of human kind.
Back then, duties like hunting, farming and gathering and the seeking
of shelter were split among the group as a proper way to build an
economic model.

A good example of early origin of the traditional economy comes from

the Maasai tribe of East Africa. There, tribal leaders designed an
economic model where decisions on labor, production and the
distribution of products and goods were based on tradition and
community custom.
One of the major advantages of Traditional Economy is that they
can be very friendly to the environment.
Traditional economies are less destructive to the environment within
sacrificing the needs of members.
Although, they may have limited production capabilities, the
outcome of these economies are predictable which makes planners
for future needs easier compared to other economy types.
COMMAND ECONOMIC SYSTEM:-
Command or socialist economic system has a dominant centralized
authority in the form of government.
The economy in such a country is controlled by thr government. It is
the sole-decision making authority for determining production and
allocation.
Ideally, the command system takes into consideration the best
interest of its populace
Example: Belarus- This former Soviet Satellite is still a command
economy. The government owns 80% of the country’s business and
75% of its banks.

Market Economy System-

A market economy is a system driven by self-interest in which
economic decisions (investment, production, and distribution) are
guided by the pricing of goods and services. These price signals are
determined by individual citizens and businesses

According to the Fraser Institute’s Economic Freedom of

the World Rankings, the five countries with the most economic freedom
are Hong Kong, Singapore, New Zealand, Switzerland, and the United
States. This report ranks countries based on these cornerstones of
economic freedom: personal choice rather than collective choice,
voluntary exchange coordinated by markets, freedom to enter and
compete in markets, and protection of persons and their property.
Mixed Economies -
Many developing countries are mixed economies in which public and
private firms engage in Cournot competition. We show that some
fundamental results in environmental economics fail to hold in these
economies: more stringent environmental regulation does not
necessarily reduce pollution levels, the equivalence between
environmental taxes and standards breaks down, and not every
emission level can be induced by emission taxes. These results are due
to the endogeneity of the public firm CEO’s career choices. Instruments
that can induce the CEO to choose a public career are most effective in
reducing emissions and improving social welfare.
Developing nations such as China and India are increasingly becoming
important players in global environmental protection due to their rapid
economic growth, large population base and fragility of domestic
ecosystems. For transboundary or global pollutants such as greenhouse
gases, pollution abatement in these nations is critical to ensure the
success of international mitigation efforts. Solving global
environmental externalities requires better understanding of the
environmental protection incentives and mechanisms within
developing nations.

The US follows a mixed economic system. Most of the industries in

the United states are dominated by private enterprises with a certain
level of government intervention such as agriculture subsidies and
financial regulations.
THANK YOU