1. C2S1: Economic Systems Main Idea:
An economic system is a set of rules that governs what goods and services to produce, how to produce them, and for whom they are produced.

2. C2S1: Economic Systems Key Terms: Economy Economic system
Traditional Economy
Command Economy
Market Economy

3. C2S1: Economic Systems Traditional Economies
Allocation of scarce resources stems from ritual, habit, or custom
Examples
Central African Mbuti
Australian Aborigines
North-Canadian Inuit

4. C2S1: Economic Systems Traditional Economies Advantages Disadvantages
Everyone knows WHAT, HOW, and FOR WHOM because it is set by tradition
Disadvantages
Discourages new ideas
Strict rules
Lower standard of living

5. C2S1: Economic Systems Command Economies
Decisions made by a central authority
Examples
North Korea
Cuba
The former Soviet Union

6. C2S1: Economic Systems Command Economies Advantages Disadvantages
Economy can change direction quickly
Disadvantages
Does not meet wants of consumers
No incentive to work hard
Large bureaucracy

7. C2S1: Economic Systems Market Economies
People and firms act in their own best interest to answer the 3 questions
Examples
United States
Canada
Great Britain

8. C2S1: Economic Systems Market Economies Advantages Disadvantages
Can adjust to change
High degree of individual freedom / lots of choices
Little government interference
Decisions made by many people / consumer satisfaction
Disadvantages
Does not provide for basic needs
Few public services
Possibility of failure

9. C2S1: Economic Systems Section 1 Assessment:
Complete # 3 – 6 on page 39 in your notebook
Show me when finished