1. Economic Systems
Economics (Economy)- is the study of how things are made and brought to them; (i.e. buying, making and selling of goods and services)
Economic System- System of economic activity in a country, region or community. The way a nation/country uses its resources to satisfy people’s needs and wants.
Every economic system has to answer three (3) basic questions:
What to produce (make)?
How to produce (make) it?
For Whom to produce (make) it?

2. Characteristics of Economic Systems
Market Economy
Traditional Economy
Most decisions are based on habits
Technology use is limited
Choices are based on customs
People often do the jobs their parents and grandparents did
Decisions and prices are made based on supply and demand
Individuals have a say in what is made (supply)
Consumers have choices about what goods and services to buy (demand)
Command Economy
Government makes all key economic decisions
Government decides the cost of products
Government decides the wages (what worker’s are paid)
Individual have little economic freedom (little to no say in what is made)