1. Answer The “Three Basic Economic Questions” about the united states
Who decides
What should be produced?
How should it be produced?
For whom should it be produced?
Give an example
Why do we need to decide what is produced? (because of scarcity and trade-offs)
Who decides what should be produced in the US? How about in North Korea?
What is the goal of how it should be produced? How to get the job done for the least cost given the available inputs (labor, capital goods, technology, etc)
How do we decide in the US who gets what?

2. Economic Systems

3. Economic System
The way that a country uses its resources to satisfy its citizens needs and wants
Types of economies:
Traditional
Market
Command

4. Traditional System Things are done the way they’ve always been done
Based on customs and beliefs
Bartering
Ad: know what is expected of you. Family and community are very strong.
Dis: change is discouraged. Methods of production are inefficient.

5. Command Economy
The government controls production and answers the 3 basic questions
North Korea
China
Cuba
Vietnam
Ad: speed with which resources can be rerouted (especially during war)
Dis: individual freedom and choice

6. Market Economy
Individuals own land and businesses and make decisions through free interaction while looking out for own best interests
U.S.?
Ad: freedom of choice
Dis: How to take care of those too young, too old, or too sick to work?

7. Market
Freely chosen activity between buyers and sellers of goods and services
What is an example of a market? Does a market have to be a physical place? What about ebay?

8. Mixed Economy
Exhibits characteristics of more than one type of economic system
Finland Sweden.
Is the US a pure market economy or more mixed?