Types of Economies. Do you think there is a nation that is 100% traditional economy? Do you think there is a nation that is 100% command economy? Do you.

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Presentation transcript:

Types of Economies

Do you think there is a nation that is 100% traditional economy? Do you think there is a nation that is 100% command economy? Do you think there is a nation that is 100% market economy?

If you answered "NO!" to these questions, you are correct. No nation can function on only one type of economy. All nations have some kind of mixed economy.

Think about the United States' economy as you examine these pictures.

Traditional Economoy Insert image of AmishSource: This is a picture of an Amish family traveling among cards on the roads. The Amish maintain the traditions of the past. In many Amish communities throughout Pennsylvania, the farms are operated without the use of modern farm equipment. Some homes do not have electricity. The Amish society answers its economic questions using its customs and traditions. The Amish are an example of the traditional part of the United States Economy.

Command Economy Development note: Insert image - Source: nfo.html nfo.html Look at the graph image of minimum wage increases. This graph shows the minimum wage increasing from 25 cents in 1938 to $5.15 in This means that in 1997 the United States government is telling companies through the Minimum Wage Law that companies must pay workers at least $5.15 per hour. The Minimum Wage Law is an example of the command part of the United States Economy.

Market Economy Development note: Insert image Source: of_America.jpg Look at the picture of the Mall of America. The mall is where many buyers go to purchase products and services. Malls also provide a central location for producers to sell products and services. These places where buyers and sellers meet are called markets. Malls and other stores represent the market part of the United States Economy.

New York Stock Exchange Insert picture of NYSE. Look at the picture of the New York Stock Exchange. This picture depicts one of the best examples of a market where buyers and sellers meet. Here, at the New York Stock Exchange, buyers and sellers of stock meet to exchange their shares, or ownership, in a variety of companies. In other words, you could buy, through a licensed process, a share of stock in Disney or Apple. This would actually make you an owner, a very small owner, of Disney or Apple. The stock market on Wall Street is an example of the market part of the United States Economy.

These images show us that the United States is not a pure market economy. The U.S. has elements of all three economies: The Amish reflect a traditional economy; The minimum wage reflects a command economy because the government tells companies how much workers get paid; The malls and stock exchanges reflect a market economy which the United States uses to determine what will sell and how to sell it at the best price to make a profit.

This means the United States has a mixed economy. Make this larger and center on screen

Check for Understanding Directions: Read the brief descriptions of parts of the American economy given below. For each description, select the appropriate type of economy: tradition, market, or command.

1. Chik Fil-A does not open on Sundays. A. traditional B. market C. command Answer:A Feedback: Stores being closed on Sunday is a custom from the past.

2. A new skateboard shop has opened at the local mall. A. traditional B. market C. command Answer: B Feedback: The shop opened based on public demand for the services and goods the shop can provide.

3. The U.S. Postal Service charges.37 for a postage stamp. A. traditional B. market C. command Answer: C Feedback: The government is setting the postage rate, not the market or tradition.

4. Professional athletes sign multi-million dollar contracts in their first year after college. A. traditional B. market C. command Answer: B Feedback: The players’ contracts are determined by the market’s demand for their talents and the available talent that year.