1. The Economic System at Work
Miss Smith
7th Grade Civics
*pgs

2. Help people create and obtain the goods and services they need
Economic Systems
Help people create and obtain the goods and services they need

3. The Need for Economic Systems
The want-satisfaction chain- the process of obtaining goods and services to satisfy your wants
How people access goods and services is what makes each economic system different
What are some of your wants, and what influences them?

4. Types of Economic Systems
3 Basic Economic Systems:
Traditional
Command
Market

5. Types of Economic Systems
Traditional
Based on how economic activity has been carried out in the past
Command
Government makes all economic decisions
Market
Economic decisions made by the people
In what ways is a market economy different from a command economy and a traditional economy? In a traditional economy, people grow their own food and make their own products (such as the Amish). In command, the government makes all economic decisions.

6. Types of Economic Systems
In a free market, competition among sellers is the main factor in setting prices

7. Life in a Market Economy
Competition for Resources
Scarcity can make products expensive and hard to obtain
Choice
Supply and Demand
What happens when a resource becomes scarce? It is harder for producers to obtain, and prices for products made with that resource might rise
How do businesses use the laws of supply and demand to try to make a profit? To increase their profit, businesses have to find the highest price that customers are willing to pay for the goods or services they offer
What factors might affect the demand for a good or service? Its price, quality, usefulness, ease of use, advertising

8. Capitalism Production is owned by private citizens
Encourages people to invest their money in their own companies or the companies owned by others

9. A mixed Economy
The government gives subsidies (or money) to certain industries so that people can afford the products they produce
Ex: The gov. gives subsidies to wheat farmers so that the farmers don’t have to charge a lot for their wheat to make a profit. As a result, products using wheat (bread, flour, etc.) is cheaper also
What are some ways the government helps protect workers? By establishing minimum wage laws, laws guaranteeing workers’ safety, and laws to protect people from discrimination
Do you think the U.S. government should control parts of our economy? Why or why not?

10. American Business
Conglomerate- businesses that have joined together to form huge organizations