1. Civics Mr. Collins and Mrs. Kozlik CE 11a
Economic Systems
Civics
Mr. Collins and Mrs. Kozlik
CE 11a

2. Basic Economic Questions:
The three basic questions of economics
What will be produced?
Who will produce it?
For whom will it be produced?
Each type of economy answers the three basic questions differently
No country relies exclusively on markets to deal with the economic problem of scarcity.

3. Characteristics of a Traditional Economy
Economic decisions are based on custom and historical precedent.
People often perform the same type of work as their parents and grandparents, regardless of ability or potential.
Example of a traditional economy: African nations, like Bangladesh

4. Characteristics of Command Economy
Central ownership of property & resources (usually government controlled)
Centrally-planned economy (usually planned by the government)
Lack of consumer choice (ex. Only one type of potato chip or cookie)

5. Characteristics of a Free Market Economy
Private ownership of property & resources
Profit is the motivator
Competition is allowed
Consumer Sovereignty – consumers decide what to buy and hence what is made
Individual Choice – consumer has choice of several similar products

6. Characteristics of a Mixed Economy
Individuals, businesses, and the government share economic decision-making
Government is more involved than in a free market economy
Most commonly used type of economic system
Government is owner and decision maker for the public sector.