1. Types of Economies

2. Economy
The way that a nation makes economic choices that involves its resources
Land – countryside/rivers/lakes
Capital – money, investments
Labor – people that work
Entrepreneurship – business ownership

3. Scarcity
Scarcity of resources makes everyone – nations, businesses, and people to have to make economic choices
What are our economic
Resources????

4. Role of the following in a private enterprise economy?
Consumer – has limited resources: Choose what best meets needs and wants
Producer – (Makes the product) Gathers information on what products and services the consumer wants
Government – Usually no interference except if there is unfair treatment or something is dangerous

5. Basic Economic Questions
What goods and services should be produced?
How should the goods and services be produced?
For what people (whom) should the goods and services be produced?

6. Three main types of mixed economies
Capitalist model
Socialist model
Communist

7. Capitalist Model (Capitalism)/Free Enterprise
Is an economic system characterized by private ownership of businesses and marketplace competition
Also referred to as democracy

8. Components of capitalist model:
Political power in hands of people
More than one political party
Freedom to vote for political candidates
Government cares about its people – cares for those who cannot care for themselves

9. Capitalism The basic economic questions are answered?
What to produce? The consumer
How should goods be produced? Producer
For whom? The consumer
Examples of capitalist countries:
U.S.A. and Japan

10. Components of socialist model:
An increase in government involvement in people’s lives and economy
Government tries to reduce difference between rich and poor
Key industries run by government - Telecommunication, mining, transportation
More social services – same standard of living; Medical care and education are free, even some college
Cost: Taxes are higher (50%+)

11. Who answers the basic economic questions – Socialist Countries?
What goods produced? – Consumer
How should the goods and services be produced? – Producer
For whom will the goods and services be produced? – Producer
Examples of Socialist countries: Canada, Germany, Great Britain, Sweden, Australia

12. Communism Government runs and owns everything One political party
All people who can work – assigned jobs
Government decides type of schooling, where live
Lack of freedom
Everyone has place to live –based on need
Medical care is free

13. Who answers the basic economic questions in Communist countries?
What goods produced? Government
How produced? Government
For whom? Government
Examples of communist countries
Cuba and North Korea

14. Review
In Cuba, the government answers all three basic economic questions. This would be an example of what economic system?
A. capitalism
B. socialism
C. communism
D. all of the above

15. Review
The basic economic problem that all countries and businesses have to face about not having enough resources is called
Regulation
Environmental concerns
Microeconomics
scarcity

16. Review
In this type of economy resources are owned by producers, producers produce because of the profit motive and individual customers decide what to buy:
A. free enterprise (capitalist)
B. socialist
C. regulated
D. communist

17. Review
The three basic economic questions all economic governmental systems must ask about the goods and services they will produce are:
A. who, what, when
B. what, how, for whom
C. who, how, where
D. where, to, for

18. Review
In a capitalist society, who answers the basic economic questions?
A. consumers only.
B. producers only.
C. consumers and producers
D. the government

19. Review
In Sweden the government controls the key industries and there are many social services for the citizens. This is an example of
A. capitalist (free enterprise) economy
B. socialist economy
C. regulated economy
D. communist economy