1. Traditional Economy
Decisions made largely by customs and habits of the past

2. Traditional Economy

3. Command Economy
Decisions made largely by the government or central planning group

4. Command Systems Today
North Korea
Cuba

5. Market Economy
Decisions are guided by change in prices that occur between individual buyers and sellers

6. Market Economy
Other Names include: Free Enterprise, Laissez-faire, and Capitalism

7. Which would you rather pay?
Market Economy
Which would you rather pay?

8. Scarcity Limited supply of something
Describes the conflict between people’s desires and limited resources

9. Results of Scarcity
Dirty drinking water leads to:
Disease
Death

10. Supply & Demand
The price of a good rises or falls depending on how many people want it and depending on how much of the good is available

11. What’s the price of a new pair of Jordan’s?
Supply & Demand
Limited Supply + High Demand =
High Price
What’s the price of a new pair of Jordan’s?