1. The system is effective in controlling market failure, since the price mechanism does not efficiently provide public goods like education, health, road, etc. The government corrects the weaknesses by providing free goods.
  2. Control of efficiency in production and wastage in the allocation of resource. The system involves some kind of planning in the case it can control wastage of resources also increase of freedom in allocation of the resources competition which also increases efficiency in production.
  3. Classes are minimized as the state take cares of the under privileged by redistributing wealth in the economy.
  4. There is wider freedom.

A private sector is allowed to produce goods and services that give consumers wider range of goods and services to consume unlike in pure socialism.

THE ROLE OF THE GOVERNMENT IN MIXED ECONOMIC SYSTEM

  1. To establish the framework of rules and regulations.
  2. To re distribution income. That is to reduce the gap between the rich and poor. E.g. high taxation, subsidization etc.
  3. To maintain laws and orders in the economy.
  4. To promote high rate of economic growth and economic development.
  5. To stabilize price in the case of inflation or deflation.
  6. To provide public goods such as;-education, health and other related public good

THE TRANSITION PERIOD

Definition: a transition period is the period between any two economic systems such that one system (the old system) is being replaced by another system (the new system).This means that the economic system has not completely collapse yet and the new system is just in the process of being established

It is a period which is characterized by the remnant features of the old economic system and the new features of the new economic system. For example;-before socialism was not well established in Russia element of capitalism were not completely wiped out in the young socialist economy

IMPORTANCE OF THE TRANSITION PERIOD

  1. It is the period of making adjustments. That is it is a period when the weakness of the old system should be left out and the good element of the old system should be in the new system
  2. It is a period of learning from the experience of other economic system in the past and present in order to determine their weakness and strengths
  3. It is the period experimenting on how the new ideas will be introduced and how these ideas will be accepted by the general public
  4. It is a period of action and seriousness with the aim of achieving the predetermined goals/objectives
  5. The transition period is necessary since it is a period of making the society aware of intended objective change and how these changes will be made.

 

PRODUCTION

Production is the process of creating utility.

In production there are four types of utilities which are form utility, time utility, place utility and possession utility.

  • To the general public, production refers to the process of making goods either for sale or for direct consumption.e.g.cultivation of maize partly for domestic consumption and other part for sale.
  • In economics, production is the process of making goods for sale. It is also known as indirect production.

Direct production refers to the process of making goods and services for direct consumption or use.

General production involves employing the factors of production by combining them to produce goods and services which aim to satisfying wants.

TYPES OF PRODUCTION

There are two major types of production these are;-

  1. Direct production.
  2. Indirect production.
    1. DIRECT PRODUCTION
    • Construction includes;- construction of roads buildings, bridges e.t.c .The material used in construction industry is obtained from the primary production.Direct production is the type of production carried by a person in order directly to satisfy his or her own wants or production for own consumption. It is mainly for subsistence of which the production is very low.

      B. INDIRECT PRODUCTION

      Indirect production means production is not attempted to satisfy own wants directly except to a very limited extent. The production of goods is aimed for selling.

      STAGES OR LEVELS OF PRODUCTION

      There are three major levels of production, which are;-

      1. Primary production.
      2. Secondary production.
      3. Tertiary production.

      PRIMARY PRODUCTION

      Involves extraction of natural resources and making them useful in their own form to human beings.e.g Agriculture, mining, and fishing and quarrying.

      The output from the primary stage is used as inputs or raw materials in the secondary stage.

      SECONDARY PRODUCTION

      Involves transforming raw materials into semi finished or finished goods. It includes;- manufacturing and construction. The output of primary production is used as inputs of secondary production. E.g. cotton produced in primary production is used in textile industries to produce clothes.

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The system is effective in controlling market failure, since the price mechanism does not efficiently provide public goods like education, health, road, etc. The government corrects the weaknesses by providing free goods. Control of efficiency in production and wastage in the allocation of resource. The system involves some...