1. MARKET ECONOMIES Compare three types of economies
Lesson 1.1
8/7/2018
LESSON 1.1
MARKET ECONOMIES
Compare three types of economies
Describe and explain the characteristics of a market economy
INTRO TO BUSINESS

2. 1.1
Economic Systems
Our businesses operate in a global marketplace and deal with a variety of economic systems that influence each other.
Countries take different approaches in how their economies operate, but each must provide answers to the same basic economic questions.

3. 1.1
Economic Problem
Scarcity is the conflict between unlimited wants and limited resources.
In order to decide how to use its scarce resources, a country must answer three key economic questions.
The answers to these questions depend in large part on the society’s economic system.

4. Key Economic Questions
1.1
Key Economic Questions
1. What to produce?
Should resources be used to provide consumer goods, industrial goods, or military goods?
2. How should things be produced?
What kinds of industries and equipment should be used?
3. For whom should they be produced?
Which of its citizens should benefit most from what is produced?

5. Types of Economic Systems
1.1
Types of Economic Systems
Traditional Economy
Command Economy
Market Economy
In a market economy, businesses and individuals are free to make their own decisions as they buy and sell in the marketplace.
Capitalism means that economic resources are privately owned by individuals rather than by the government.

6. 1.1
CheckPOINT
What is the major difference between a command economy and a market economy?
Is that difference important to you? Why or why not?

7. Characteristics of Market Economies
1.1
Characteristics of Market Economies
Private enterprise
Private property
Profit
Competition

8. 1.1
Private Enterprise
An individual’s right to own a business, select a market to enter, and produce with limited government direction is called private enterprise.

9. 1.1
Private Property
Your right to private property means that you can own, use, and dispose of things of value.

10. 1.1
Profit
Profit is the amount of money left over when subtracting the expenses of operating a business from its income—it is a reward for taking risks.

11. 1.1
Competition
Competition is the rivalry among businesses to sell their products and services to consumers.

12. 1.1
CheckPOINT
Which of the characteristics of a market economy do you believe is the most important?
Why would it be important to you as a business owner?