1. Economic Systems

2. Traditional
Command
Market

3. Objectives
Identify three questions that all economic systems must answer.
Describe a traditional economy
Describe a command economy
Describe a market economy
Explain how most economies have a mixed economy located on a continuum between a market and command economy

4. Vocabulary Break Economic System
the system of production and distribution and consumption

5. Three Economic Questions
What to produce?
How to produce?
For whom to produce?

6. Traditional
A traditional economy is shaped largely by customs and religion.
Economic questions are answered by what happened in the past.
Traditional economies are mainly found in rural areas.

7. What to produce?-Traditional
Just what is needed to take care of self

8. How to produce?-Traditional
How it was produced in the past

9. For whom to produce?-Traditional
Self and one’s household

10. Positives of a traditional economy
Predictable
Knowing what your job will be
Knowing the way you will live

11. Problems with a traditional economy
Lack many resources
Only produce enough to live on

12. Command
In a command economy the government answers the three basic economic question
Sometimes called communism

13. What to produce?-Command
What the government determines

14. How to produce?-Command
Government says how to produce

15. For whom to produce?-Command
Citizens regardless of market demand

16. Positives of a command economy
Because the government makes the decisions, people don’t have to worry about employment, housing, education, and healthcare

17. Problems with a command economy
Consumers get low priority
Little freedom of choice
All resources are owned by the government

18. Market
In a market economy, buyers and sellers answer the three economic questions.
All resources are privately owned

19. What to produce?-Market
Producers and consumers
Whatever the market demands that will produce a profit

20. How to produce?-Market
By private producers

21. For whom to produce?-Market
Consumers who demand the product and are willing to pay

22. Positives of a market economy
People can start their own businesses
People have choice

23. Problems with a market economy
The desire for money may lead to poor quality of goods and services
Business owners have to risk losing money

24. Vocabulary Break Continuum
A continuous seamless series.
A link between things that gradually and seamlessly connects. It is impossible to say where one becomes the next.

25. Continuum of Economies
Pure Command
Pure Market
Most Individual freedom
No Individual freedom
Most economies fall in between a pure market and a pure command economy on the continuum