The Economic System at Work Miss Smith 7th Grade Civics *pgs. 450-458

Help people create and obtain the goods and services they need Economic Systems Help people create and obtain the goods and services they need

The Need for Economic Systems The want-satisfaction chain- the process of obtaining goods and services to satisfy your wants How people access goods and services is what makes each economic system different What are some of your wants, and what influences them?

Types of Economic Systems 3 Basic Economic Systems: Traditional Command Market

Types of Economic Systems Traditional Based on how economic activity has been carried out in the past Command Government makes all economic decisions Market Economic decisions made by the people In what ways is a market economy different from a command economy and a traditional economy? In a traditional economy, people grow their own food and make their own products (such as the Amish). In command, the government makes all economic decisions.

Types of Economic Systems In a free market, competition among sellers is the main factor in setting prices

Life in a Market Economy Competition for Resources Scarcity can make products expensive and hard to obtain Choice Supply and Demand What happens when a resource becomes scarce? It is harder for producers to obtain, and prices for products made with that resource might rise How do businesses use the laws of supply and demand to try to make a profit? To increase their profit, businesses have to find the highest price that customers are willing to pay for the goods or services they offer What factors might affect the demand for a good or service? Its price, quality, usefulness, ease of use, advertising

Capitalism Production is owned by private citizens Encourages people to invest their money in their own companies or the companies owned by others

A mixed Economy The government gives subsidies (or money) to certain industries so that people can afford the products they produce Ex: The gov. gives subsidies to wheat farmers so that the farmers don’t have to charge a lot for their wheat to make a profit. As a result, products using wheat (bread, flour, etc.) is cheaper also What are some ways the government helps protect workers? By establishing minimum wage laws, laws guaranteeing workers’ safety, and laws to protect people from discrimination Do you think the U.S. government should control parts of our economy? Why or why not?

American Business Conglomerate- businesses that have joined together to form huge organizations