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What are the basic economic institutions?
There are two fundamental economic institutions which have been so far used into the real world are as:
a. Market economic institution (i.e., the price mechanism): Many decisions on economic activities are made through individuals. It primarily decentralized decision system is the most significant economic institution discovered for reaching cooperation in between individuals and solving the conflicts which arise between them. There market economy has been proven to be only economic institution, so far, which can remain sustainable development and growth into an economy.
b. Planed economic institution: Many decisions onto economic activities are made by governments that are mostly centralized decision systems.
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two or more variable inputs
relationship between tfc , tvc , tc
Gains from International Trade: It leads to increased total world production of goods and services. International trade based on comparative cost advantage allows countries to
Wage Labour: A form of work in that employees perform labour for others, under their direction, in return for salaries orwages. Employer controls and owns the product of the labour
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