Traditional Economy Decisions made largely by customs and habits of the past
Traditional Economy
Command Economy Decisions made largely by the government or central planning group
Command Systems Today North Korea Cuba
Market Economy Decisions are guided by change in prices that occur between individual buyers and sellers
Market Economy Other Names include: Free Enterprise, Laissez-faire, and Capitalism
Which would you rather pay? Market Economy Which would you rather pay?
Scarcity Limited supply of something Describes the conflict between people’s desires and limited resources
Results of Scarcity Dirty drinking water leads to: Disease Death
Supply & Demand The price of a good rises or falls depending on how many people want it and depending on how much of the good is available
What’s the price of a new pair of Jordan’s? Supply & Demand Limited Supply + High Demand = High Price What’s the price of a new pair of Jordan’s?