Economic Systems PDF

What is an Economic System? Determines how a society uses their resources. Goods and services are provided for the society. Allows a society to make money. Based on a society’s traditions and values.  Economic Systems Answer Three Questions: WHAT to HOW produc...

What is an Economic System? Determines how a society uses their resources. Goods and services are provided for the society. Allows a society to make money. Based on a society’s traditions and values.  Economic Systems Answer Three Questions: WHAT to HOW produce? to produce? FOR WHOM to produce?  Let’s Check In! Which of the following is NOT a purpose of economic systems? o To provide goods and services. o The utilization of resources. o To To control thegovernment. control the government. o Storage and distribution of products. Four Types of Economic Systems Traditional Command Market Mixed  Traditional Economy Based on tradition and customs. Focuses on agriculture. Found in rural areas of developing countries. Goods are made based on the needs of the community.  Traditional Economy Pros Cons No competition between Not much room for growth and producers. development. System is easy to understand. Limited technology used. Few wasted resources. No surplus, or extras.  Let’s Check In! Which society would most likely have a traditional economy? o One that allows private ownership. o One One that thatvalues valuesfarming farmingasas a means of production. a means of production. o One that has a wealthy government. o One that values big businesses.  Command Economy All land and resources are controlled by the government. Government decides what is produced. Government decides the price of goods and services. Needs of society are more important than individual needs. Photography by: Salvador Aznar  Command Economy Pros Cons Low unemployment. No incentive to work hard. Consumers do not have an Everyone’s basic needs are met. input. Very few social classes. -  Market Economy No government control. People can own private property. Businesses are created and run by citizens. Supply and demand determines production and price. ○ Supply - how much of a product is available. ○ Demand - how much of a product is needed or wanted.  Market Economy Pros Cons Everyone’s basic needs are not Variety of goods and services. met. Consumers can buy whatever Wealth is not equal. they want. Involves technology and - innovations.  Let’s Check In! Decide if the characteristics below describe a market or command economy. 1. No government control - market economy 2. Government controls production - command economy 3. Private ownership - market economy 4. Government owns land and resources - command economy  Mixed Economy Includes qualities of a command and market economy. Businesses are privately owned. Public services are controlled by the government. Supply and demand determine the price of goods and services. Government intervenes to keep things fair.  Mixed Economy Pros Cons Employment, education, and High taxes to provide public health care are provided by the services. government. Consumers can buy whatever Less effective than a market they want. economy.  Turn & Talk With a partner, discuss a mixed economy: A) What characteristics of a market economy can be found in a mixed economy? B) What characteristics of a command economy can be found in a mixed economy?  Reflection After learning about the four types of economic systems, which system do you think benefits society the most? Use details from the presentation to support your answer.