Miss Smith 7 th Grade Civics *pgs

 Help people create and obtain the goods and services they need

 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

3 Basic Economic Systems:  Traditional  Command  Market

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 a free market, competition among sellers is the main factor in setting prices

 Competition for Resources  Scarcity can make products expensive and hard to obtain  Choice  Supply and Demand

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

 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

 Conglomerate- businesses that have joined together to form huge organizations