1. An overview of economic systems: contrast traditional, command and market economies. What countries are considered economically free

Social insurance is a form of social welfare that provides insurance against economic risks. The insurance may be provided publicly or through the subsidizing of private insurance. In contrast to other forms of social assistance, individuals' claims are partly dependent on their contributions, which can be considered insurance premiums to create a common fund out of which the individuals are then paid benefits in the future. Social insurance is defined as a set of government-provided programs meant to shield people from financial struggles which may occur due to unforeseen or unavoidable situations, such as loss of employment, physical disability, or reduced earnings due to retirement.
Social insurance is significant as it helps in accounting for the unpredictability of life that people might face during heath crises and retirement. Therefore, it is necessary to protect from the inevitable long-term risks.
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1. 
   How we use theories the circular flow diagram model to understand economic issues. Draw the circular flow diagram.
   

Cavab: The circular flow diagram shows how households and firms interact in the goods and services market, and in the labor market. The direction of the arrows shows that in the goods and services market, households receive goods and services and pay firms for them. In the labor market, households provide labor and receive payment from firms through wages, salaries, and benefits. The circular flow diagram simplifies this to make the picture easier to grasp. In the diagram, firms produce goods and services, which they sell to households in return for revenues. This is shown in the outer circle, and represents the two sides of the product market (for example, the market for goods and services) in which households demand and firms supply. Households sell their labor as workers to firms in return for wages, salaries and benefits. This is shown in the inner circle and represents the two sides of the labor market in which households supply and firms demand.

2. 
   Elasticity as economics concept that measures responsiveness of one variable to changes in another variable. Explain price elasticity of demand and price elasticity of supply. Calculate the price elasticity of demand and the price elasticity of supply.
   
3. 
   Distinguish between a natural monopoly and a legal monopoly. Give examples of this in Azerbaijan. Under U.S. law, no organization but the U.S. Postal Service is legally allowed to deliver first-class mail. Is this legal or natural monopoly?
   

Cavab: An example of a legal monopoly is Walmart. Walmart Inc. is a retail corporation with enormous production facilities and customers all over the world. Examples of legal monopolies include telephone, electricity, water, and postal services. They are instituted, supported, regulated, and sometimes run by governments. A natural monopoly differs from a legal monopoly based on government involvement. Legal monopolies are mandated by governments, while natural monopolies exist because the production costs in a particular industry are too high for potential competitors to join in. A