Section 1: Answering the Economic Questions Unit 2: Economic Systems

Three Key Economic Questions 1. WHAT goods and services should be produced? 2. How should those goods and services be produced? 3. Who gets to have the goods and services after they are produced?

Some Basic Vocabulary Economic SYSTEM How a society produces and distributes goods and services Factor Payment What people get paid for. their land, labor or capital

Traditional Economies Oldest form of economy Simplest form of economy Relies on Habit Custom Tradition Not much Innovation Change

Traditional Economies Revolves around the family Several generations working together Gender roles for work Social Characteristics Small Close-knit Work together to support each other Primary effort Hunting Farming