Economics in Louisiana Economic Systems And Four Basic Economic Questions

Economics Three Economic Systems Four Basic Economic Questions Traditional Economy Command Economy Market Economy Four Basic Economic Questions What to produce How to produce How much to produce For whom to produce

Traditional Economy What to produce – candy How to produce - the third week in September we will have boxes of candy to sell purchased a fundraiser company How much to produce – each band student will sell one box of candy with 50 candy bars for $1 each Who they are producing for – candy bars will be sold to neighbors, friends, and family

Traditional Economy Customs, habits, and beliefs determine how to answer the four economic questions If the band has a candy sale this year because every year for the last 10 years the band had a candy sale this is a traditional economy The band is selling candy because of tradition The four basic economic questions can be answered the same way every year There is always the option of changing but why change when this fundraiser serves the purpose

Command Economy What to produce – car wash How to produce - the second week in April we will have a car wash in the Wal-Mart parking lot, we will need buckets, soap and wash cloths, the car wash will last from 9am – 2pm, the Beta Club will wash cars How much to produce – there will be a $2 charge to wash a car, we will wash as many cars as possible within this time Who they are producing for – we will have signs near the road to advertise to the people driving on the highway and we will have club members invite family and friends

Command Economy Someone else (government/principal) controls the economy and answers the answers the four basic questions A Beta Club may have a car wash because the adult in charge of the club says that this is the only fundraiser they can have There may be another option but the person in charge said that this is the only option available to the club

Market Economy What to produce – groceries for the public How to produce - open everyday from 7am – 8pm, prices vary depending on the item purchased, I have purchased a building on state street in Abbeville and I will call it Robie’s, supplies will come from various vendors, I will hire employees for different shifts How much to produce – A set amount of each item will be purchased as stock for shelves, there is an inventory control system in place to let me know what is needed to replenish my supplies Who they are producing for – advertising in the newspaper and word of mouth for the people needing groceries

Market Economy Based on free enterprise or private ownership and the freedom to make economic choices Robie’s is a free enterprise, the owner decides what to sell and the amount of items to keep in inventory The sales from this store depends on the needs of the community and supply and demand