1. September 9, 2016 REMINDERS OBJECTIVES DECA forms due 9/26
9/30/2015
September 9, 2016
OBJECTIVES
(35) Explain the three basic economic questions.
(42) Compare the American economic system to other economic systems.
REMINDERS
DECA forms due 9/26
DECA meeting Tues., 9/13 L519 8:20am
TODAY’S AGENDA
CLOSURE
Provide an example of how some societies (governments) prioritize economic spending differently than others.
QOTD
Economic Systems
PowerPoint & Notes. WebQuest using the World Factbook.

2. ECONOMIC SYSTEMS
Introduction to Business & Marketing

3. Basic Economic Questions
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Basic Economic Questions
Each nation must answer the three economic questions when deciding how to use their limited resources.
The economic questions define the nation’s economic system.
What goods and services should be produced?
How should those goods and services be produced?
For whom should the goods and services be produced?

4. COMPARE THE AMERICAN ECONOMIC SYSTEM WITH OTHER ECONOMIC SYSTEMS.
Task 42

5. Economic Systems Economists classify economic systems
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Economic Systems
Economists classify economic systems
into three categories:
◦Traditional Economies
◦Market Economies
◦Command Economies

6. Traditional Economy
The allocation of resources is based on habit or customs:
o tradition
o religious practices
o cultural beliefs & ideals
Economic activities are centered around the family unit.

7. Custom-Based Economy (Traditional)
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Custom-Based Economy (Traditional)
◦What: little choice as to what to produce
◦How: bound to tradition; follow what their families have done for generations
◦For Whom: tradition regulates who sells goods and to whom

8. Command Economy ◦The economy is centrally planned and directed.
◦Resources are owned and controlled by the government.

9. Directed Economy (Command)
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Directed Economy (Command)
◦What: one person (dictator) or one
governing body decides what to produce
◦How: resources are owned and controlled (distributed) by the government
◦For Whom: government decides who will receive which goods to meet basic needs

10. Market Economy Private enterprise drives the economy.
Individuals own resources.
Businesses compete for customers.
There is NO government involvement.
Found in societies with democratic forms of government where individuals control the economy.

11. Market Economy (Private Enterprise)
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Market Economy (Private Enterprise)
◦What: consumers decide what will be
produced by the purchases they make
◦How: companies find the most efficient means of production to increase profits
◦For Whom: people with purchasing power

12. WHY IS IT THAT THERE ARE NO PURE ECONOMIC SYSTEMS IN THE WORLD TODAY?
THINK ABOUT IT!

13. 9/30/2015
COMPARING SYSTEMS
Examine the differences that exist between nations using different types of economic systems.