2. Characteristics of the basic economic systems
Objective 9.4 (CE9b)
Characteristics of the basic economic systems

3. an established way of dealing with…
economic system:
an established way of dealing with…

4. consumer services goods resources capital labor producer distributor
land
capital
labor
producer
distributor
management
entreprenuer

5. consumer services goods resources capital labor producer distributor
land
capital
labor
producer
distributor
management
entreprenuer

6. an established way of dealing with
economic system:
an established way of dealing with
production, distribution, and consumption
of goods and services

7. an established way of dealing with
economic system:
an established way of dealing with
production, distribution, and consumption
of goods and services

8. who decides who gets the goods and services?
economic system:
who decides
who gets
the goods and services?

9. The key to identifying economic systems is to determine….
who is in control of…
CHOICE

10. “Chart of economic systems”
CHOICE
What and how much produced
How to produce
For whom to produce
GOVERNMENT
INDIVIDUAL

12. command
economic
system

13. command economic system
The government
has complete control
over choice

14. command economic system
lack of consumer choice:
the consumer
has NO voice in deciding what will be produced

15. command economic system
centrally planned economy:
the national government makes the econ. decisions
(What, How, For whom)

16. command economic system
central ownership of
property and resources:
The national gov’t owns the
factors of production

17. command economic system
COMMUNIST:
The command system is usually called
“communism”

19. demand
economic
system

20. demand economic system
The individual
has complete control
over choice

21. demand economic system
Adam Smith
In 1776 he wrote book:
Wealth of Nations

22. demand economic system
The book examined the consequences of
economic freedom

23. demand economic system
The book outline the
free enterprise system

24. demand economic system
“laissez-faire”
means:
government leaves economics alone

25. demand economic system
individual choice:
people decide how they will spend their money

26. demand economic system
consumer sovereignty:
the consumer decides what will be produced by using his buying power

27. demand economic system
profit:
the entrepreneur keeps the money that is left over after his expenses

28. demand economic system
competition:
entrepreneur tries to produce goods and services that will appeal to the consumer

29. demand economic system
private ownership of
property and resources:
Individuals own the
factors of production

30. demand economic system
FREE MARKET ECONOMY:
Another name for the demand economic system is “free market economy”

31. demand economic system
CAPITALIST:
Another name for the demand economic system is “capitalism”

33. Chart of economic systems
CHOICE
GOVERNMENT
INDIVIDUAL

34. Chart of economic systems
CHOICE
COMMAND
DEMAND

35. Chart of economic systems
CHOICE
COMMUNIST
CAPITALIST

36. Chart of economic systems
CHOICE
FREE MARKET
COMMUNIST