Economic Systems and the Different Types

An economic system is an organized way of providing for the wants and needs of a society’s people

What is an economic system?

Scarcity is why every government needs a system to determine how its resources will be used

What is scarcity and why does the government need it?

1. Traditional economy

2. Command economy

3. Market economy

4. Mixed economy (Market and Command)

What are the four economic systems?

What, How and For questions are answered based on tradition and customs of the region

What, How, and For whom questions are answered based on what for traditional economy?

Everyone does what their parents did

What does everyone do with traditional economy?

Native Americans in Africa and South America, Inuit in Canada, Rural India Caste System are all examples of a traditional economy

What are some examples of a traditional economy?

How to produce is decided by tradition and how things have been done in the past with traditional economy

How to produce is decided by what with traditional economy?

What is produced is decided by customs and ancestors with traditional economy

What is produced is decided by what with traditional economy?

Who is produced for is decided by need of village people with traditional economy

Who is produced for is decided by what with traditional economy?

The strengths in traditional economy is a predictable life and everyone’s role is set

What are the strengths in a traditional economy?

The weaknesses in a traditional economy are new ideas are discouraged, lack of progress made and lowers standard of living

What are the weaknesses in a traditonal economy?

Three basic questions of what, how and for whom are answered by the government

What, How, and For whom questions are answered based on what for command economy?

Government owns most of the property for command economy

Which economy does government own most of the property?

Normally the command economy is in a socialist or communist society

What society normally does the command economy have?

Scarce resources are owned by the government for the command economy

What resources are owned by the government for the command economy?

Some strengths for the command economy is changing quickly due to the government and meeting the basic needs of people

What are the strengths for the command economy?

Consumers wants and needs are not met, little flexibility, no individuality and no motivation to get people to work in the command economy

What are the weaknesses for a command economy?

North Korea, Cuba,Republic of China, former USSR are all examples of command economy

What are some examples of a command economy?

The market economy is also known as the Capitalism or the Free Enterprise system

What are two other names the Market Economy is known as?

The market economy system is set by the buyers and the sellers interacting. This is how prices are set based on supply and demand

How is the market economy system set up?

Private ownership of goods and services

What do they have ownership of with the market economy?

Questions of what, how and for whom are answered in the market through buyers and sellers

What, How, and For whom questions are answered based on what for market economy?

For the market economy it is based on competition between companies

What is it based between with the market economy?

What is produced is decided by individuals in the market economy

What is produced is decided by who in the market economy?

How to produce is determined by businesses in the market economy

How much is produced is determined by what with the market economy?

For whom it is produced is determined by consumers in the market economy

For whom it is produced by is determined by who in the market economy?

The strengths of the market economy can adjust to change, has freedom for individuals, market makes decisions with little government involvement and has a large selection of goods and services

What are the strengths of the market economy?

The weaknesses of the market economy is that the old and sick are unable to work and are left out, monopolies can take over and remove competition

What are the weaknesses of the market economy?

United States is as close to a pure market example that we have

What country is as close to a pure market example that we have?

Mixed economy is when some resources are owned by the government and some are owned by individuals

Who owns the resources for a mixed economy?

Government intervenes as needed in market to ensure success

How does the government intervene with a mixed economy?And what does it help ensure?

Most modern economies are mixed economies, but are heavy on one type or another

What are most modern economies?

Mixed=Market + Command

What does the mixed economy equal?

What and how to produce is determined by businesses who own most resources but are regulated by government for the mixed economy

What, How, and For whom questions are answered based on what for mixed economy?

What is produced is determined by businesses in a mixed economy

What is produced is determined by who with the mixed economy?

How to produce goods and services is determined by businesses with government regulation in a mixed economy

How to produce goods and services is determined by what in a mixed economy?

Some examples of a mixed economy are Brazil, Canada and United Kingdom

What are some examples of a mixed economy?

The three important basic questions to know are:

1. What to produce

2. How much to produce

3. For whom to produce

What are the three important basic questions to know?