Types of Economic Systems ECONOMY What is Produced? How Goods are Produced How People Get Products Traditional Command Market What people need to survive (food, shelter, & tools) Farming Hunting Gathering People make their own, share, or trade EX→ Australian Aborigines However the government decides -Class -Reward System -Waiting in Line Whatever the government decides However the government decides EX→ Soviet Union Cuba

Types of Economic Systems ECONOMY What is Produced? How Goods are Produced How People Get Products Traditional Command Market What people need to survive (food, shelter, & tools) Farming Hunting Gathering People make their own, share, or trade EX→ Australian Aborigines

Types of Economic Systems ECONOMY What is Produced? How Goods are Produced How People Get Products Traditional Command Market What people need to survive (food, shelter, & tools) Farming Hunting Gathering People make their own, share, or trade EX→ Australian Aborigines However the government decides -Class -Reward System -Waiting in Line Whatever the government decides However the government decides EX→ Soviet Union Cuba Business Owners determine the most efficient legal methods of production Determined by how much a person is able or willing to pay Whatever people are willing to buy & sell EX→ Canada United Kingdom

Return to our……. “Essential Question(s)” What are the major physical features of Australia, and where are they located on a map (Great Barrier Reef, Coral Sea, Ayers Rock, and Great Victoria Desert)?

Coral Sea Great Barrier Reef Ayers Rock “Uluru” Great Victoria Desert

R70-71 Australian Economy

Today’s Standard c. Describe the economic system used in Australia. SS6E8 The student will analyze different economic systems. a. Compare how traditional, command, and market, economies answer the economic questions of 1 -what to produce, 2-how to produce, and 3-for whom to produce. b. Explain how most countries have a mixed economy located on a continuum between pure market and pure command. c. Describe the economic system used in Australia.

Intro to our……. “Essential Question(s)” What is the economic system used in Australia? What types of economic systems exist in the world today?

Economics is the study of how people manage their resources. What is Economics?????? Economics is the study of how people manage their resources.

Types of Economic Systems Traditional- customs & habits of a society will determine what will be produced & how it will be distributed & consumed (Usually includes bartering, rather than money). Traditional economies are becoming more rare.

Types of Economic Systems Command- Government will determine what will be produced & how it will be distributed & consumed. Government will set prices and set regulations (rules) that industries must follow.

Types of Economic Systems Market- Individuals, private companies, & consumers will determine what will be produced & how it will be distributed & consumed (Supply & Demand). Individuals and companies are allowed to produce freely without government interference.

Types of Economy MIXED- The most common type in the world. Most nations today have some form of “mixed economy.” This means that the national economy may have some aspects of a market economy & some aspects of a command economy. EXAMPLES The United States is thought to have a “mixed” economy. The government does not decide what will be produced & how much it will cost, but it does regulate certain goods & services, such as illegal drugs Australia is thought to have a “mixed” economy. The government does not decide what will be produced & how much it will cost, but it does regulate certain goods & services, such as illegal drugs. Australia is thought to have one of the most free economies in the world.

Economic Systems Pure Command Pure Market Mixed Economy AUSTRALIA CUBA (Total Government Control) Pure Market (No Government Control) AUSTRALIA Certain things are regulated , like illegal drugs & the Govt. runs the Postal Service CUBA The Govt. runs all industry. BRAZIL Certain things are regulated & the Govt. runs the Postal Service & Healthcare Mixed Economy (All modern economies fall into this category)

What government controls Some substances are illegal Country Type of Economy Growing Or Struggling What government controls Australia Mixed Market Not Much- Postal Service & Some substances are illegal Growing Australian Economic Data Source: CIA World Fact Book Type of Currency: Gross Domestic Product (GDP): World Rank: GDP per Capita: What does a high GDP & GDP per Capita tell us about the Standard of Living in a country?______________________________________________________________ Australian Dollar $889.6 Billion est.2010 18th $41,300 est. 2010 17th It is probably pretty good

Specialization- When a country focuses on producing what they can produce and sell most easily. Hey Australia! What is your Specialty??????? Australia specializes in the production and export of: Coal, Iron Ore, Wool, Wheat, & Mineral Resources

****EVERYBODY WINS**** SPECIALIZATION:______________________________________________________________________________________ 3 Ways “specialization” benefits (helps) Australia and/or encourages worldwide trading: _____________________________________________ When a country produces the few things that it can produce & sell most easily. Specializes & makes products from its own natural resources Exports its products & makes money Imports products it can’t make itself & other countries make money ****EVERYBODY WINS****

Human-Made Trade Barriers Tariff – a Tax on Imported Goods (makes them more expensive & makes it less likely consumers will buy) Quota- A Limit on the amount of goods that can be imported from another country. Embargo- A total Ban on trade with a country – Usually motivated by politics to hurt another country economically.

TARIFF QUOTA EMBARGO Tax on imported goods Human-Made Trade Barrier What is it? Why is it done? TARIFF QUOTA EMBARGO To raise the prices of imported foreign goods, so people choose to buy cheaper goods made domestically Tax on imported goods Limit on the amount of imported goods To raise the prices of imported foreign goods, so people choose to buy cheaper goods made domestically Total ban on imported goods from a country To punish a country economically

Open your Gallopade Books to p.165

Return to our……. “Essential Question(s)” What is the economic system used in Australia? What types of economic systems exist in the world today?