1. Traditional Economies/ Subsistence Farming
Farmers raise just enough crops for family to survive
People make goods for themselves
Rural, non-developed countries
Some parts of Asia, Africa and SA
The Inuit in Canada is a modern day example.
Little surplus or exchange of goods

2. Traditional Economies
Farming, hunting and gathering are done the same way as the generation before
Economic activities are usually centered toward the family or ethnic unit
Men and Women are given different economic roles and tasks

3. Cottage Industry
Small scale industries based in the home.

4. Subsistence Agriculture self-sufficiency farming in which the farmers focus on growing enough food to feed their families.

5. What are 2 Different World Economies?*
07/16/96
What are 2 Different World Economies?
Economic Geography *

6. TWO SCHOOLS OF THOUGHT Power to the Government or Few
Power to the People or Many
Power to the Government or Few

7. Adam Smith
Adam Smith ( ) is considered the father of modern economic theory

8. Wealth of Nations
Smith held that the wealth of a nation, what we today call the income of a nation, depends upon (1) the productivity of labor and (2) the proportion of laborers who are usefully employed. Because he assumed that the economy will automatically achieve full employment of its resources, he examined only those forces that determine the capacity of the nation to produce goods and services.

9. Karl Marx
Karl Marx ( )
Co-author
The Communist Manifesto

10. Communist Manifesto
For Marx, an ideal economic system would involve exchanges of equal value for equal value, where value is determined simply by the amount of work put into whatever is being produced.
A bicycle takes 1 hour to make
A car takes 100 hours to make
Therefore a car is worth 100 bikes

11. Command Economies
The government or other central authority makes decisions and determines how resources will be used
Change can occur relatively easily
There is little individual freedom
There is no competition
Businesses are not run to create a profit

12. Command Economies Consumers have few chooses in the market place
Factories are concerned with quotas
Shortages are common because of poorly run factories and farms
The government dictates the job in which you work
Do you know what a quota is?

13. Command Economies The government sets the prices of goods and services
Examples of command economies: Cuba, North Korea and the People’s Republic of China

14. Free Market Economies Capitalism Free Enterprise
Profit is the motive for increasing work rather than quotas
Resources are owned and controlled by individuals
Economic decisions are made by individuals competing to earn profits
Individual freedom is considered very important
SUPPLY AND DEMAND Wide selection of consumer goods

15. Market Economies There are many economic freedoms
There is competition among businesses
Competition determines price which increase the quality of the product

16. Socialist Mixed Economies
Government owns large industries and sets some prices
Government and individuals share the decision making process
Government guides and regulates production of goods and services offered
Individuals own means of production
Protects consumers and workers from unfair policies

17. Physical Geography affects on economic activities
Saudi Arabia has vast oil reserves
So it produces and refines oil
Because of its climate and soil
Columbia grows coffee beans
Because Japan consists of islands
Many people there engage in fishing

18. Review Four Types of Economics Traditional Economies Command Economies
Free Market Economies
Socialist Economies
Physical Geography