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Transcript

Production Possibility Curve

Concepts of:

Scarcity

Choices

Four in ten North Koreans are chronically short of food and further cuts to already minimal rations are expected after the worst harvest in a decade, reported by the United Nations.

North Korea is spending about a third of its national income on its military, a much larger amount than announced, as it builds its forces despite a struggling economy.

North Korea’s defence goods consist of assault rifles, missiles and tanks. All these are capital goods making the defence industry capital intensive.

However, North Korea's comparative advantage lies on labor intensive business, with abundant labor forces at a low cost.

North Korea produces two products- defence goods and consumer goods.

If it allocates its resources to defence goods, it will produce at Point A.

If it allocates its resources to consumer goods it will produce at Point F.

Opportunity

Cost

Instead of spending millions in military, North Korea could allocate their resources towards increasing food assistance and providing fortified foods to meet the current needs.

NORTH KOREA

Conclusion

North Korea, officially the Democratic People's Republic of Korea, is a country in East Asia constituting the northern part of the Korean Peninsula.

Capital: Pyongyang

Area: 120,538 km²

Supreme leader: Kim Jong-un

Population: 25.55 million

The economic history of North Korea portrays stagnation and crisis, with intermittent phases of recovery and sluggish economic growth.

Bibliography

Economic System

https://www.britannica.com/place/North-Korea/Local-government

https://www.investopedia.com/articles/investing/013015/how-north-korea-economy-works.asp#:~:text=North%20Korea%2C%20officially%20known%20as,the%20use%20of%20free%20markets.

http://keia.org/publication/structure-north-koreas-political-economy-changes-and-effects

https://www.aljazeera.com/news/2019/05/ten-million-north-koreans-suffering-severe-food-shortages-190503152328956.html?fbclid=IwAR0HX5FT01CC4mqb6PCALO7FmhI31ycl0Jsr8xkTc0SES8Qq0pkof0Byhw8

https://ca.reuters.com/article/topNews/idCATRE70H1BW20110118?fbclid=IwAR3uQokv6EYYroZa4LXL0YSLt8ziZdnKChUt58g3niHv_OowF9FkkgoBMW4

Decision Making

North Korea is an unreformed, isolated, tightly controlled, dictatorial command economy.

Resource Ownership

The industrial sector is organized into state-owned enterprises and production cooperatives.

Public sector economic decision-making

Public sector resource ownership

Rationing System

Almost all items, from food to clothes, have traditionally been handed out through a public distribution system, with money only having a symbolic meaning. Ratios of food depend on hierarchy in the system.

Non-price rationing

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