Class notes ISB 551 Islamic Economics: Principles and Analysis

ISLAMIC MICROECONOMICS
Part 5

, LEARNING OUTCOME
 Understand the characteristics of various market
structures and their advantages and disadvantages
 Comprehend the position of perfect competition,

monopoly, monopolistic competition and oligopoly fro
conventional and Islamic perspectives

, MARKET AND ECONOMIC SYSTEMS
 Market – place for buyers and sellers to
undertake exchange activities
 Functions
communicating price information
setting the price of traded items
facilitating deals and transactions
influencing the allocation of resources
assisting in the distribution of income and wealth
 Roles -

, MARKET AND ECONOMIC SYSTEMS
 Roles – different based on economic systems
Free market system
become foundation of the system to allocate economic resour
and for the distribution of income and wealth
Command economic system
Market functions in the system are limited
Government determines what goods should produced, how m
should be produced and the price at which the goods are offe
for sale
Islamic economic system
Comprehensive
Islamic rules of the game
Market – harmonious interactions between human and the
creator, other human and the universe.