1. Economic Systems

2. Types of Economic Systems
Market economy
Based on freedom of companies, people, to make own economic decisions
Free market- no government influence on economy

3. Types of Economic Systems
Traditional economies- based on how economy has been run in past
Barter system, grow crops for sale, produce own goods for sale

4. Traditional
Economy
India

5. Types of Economic Systems
Command economy- gov’t controlled economy
Communist

6. Command Economy- Cuba

7. Scarcity Lack of a particular resource
With lack of resource the price of that good goes up
Products made from that good go up
Ex. Crude oil makes gas, no oil higher gas prices

9. Supply and Demand Law of supply
Businesses have more product, when they can sell them at high prices
Produce fewer products when prices are low

10. Supply and Demand Law of Demand
Buyers will demand more product when good price is low
As prices rise, the demand falls
As price rises, people do not buy product

12. Free Enterprise
Business owners free to run business with little direction or interference from government
Make huge profits
Competition from other companies makes good prices

13. Capitalism Economic system Economy owned by private citizens
Invest money
Little government intervention

14. Monopolies One company has complete control over good or service
No competition can set price as they see fit
Ex. Carnegie Steel 1800’s, Microsoft

16. US Economic System Has a mixed economy
Part market, traditional, command
How are we a mix of different economic systems?