1. Economic Systems
Chapter 2

2. Economic System
An organized way of providing for the wants and needs or their people
Three major types of Economic systems:
Traditional Economy
Command Economy
Market Economy

3. Create the chart in your notebook and use pages 32-35 to fill it in…
Traditional
Command
Market
Strengths
Weaknesses
3 economic questions

4. Traditional
Command
Market
Strengths
-Stable , predictable and continuous
-Capable of dramatic change in short time
-able to adjust to change gradually
-individual freedom
-less gov’t interference
-large variety
-consumer satisfaction
Weaknesses
-Discourages new ideas
-Stagnation and lack of progress
-Does not meet wants and needs of consumers
-lacks incentives
-large bureaucracy
-little flexibility
-discourages new and different ideas
-rewards only productive resources
-must guard against market failures

5. What? Based on tradition
Traditional
Command
Market
Strengths
-Stable , predictable and continuous
-Capable of dramatic change in short time
-able to adjust to change gradually
-individual freedom
-less gov’t interference
-large variety
-consumer satisfaction
Weaknesses
-Discourages new ideas
-Stagnation and lack of progress
-Does not meet wants and needs of consumers
-lacks incentives
-large bureaucracy
-little flexibility
-discourages new and different ideas
-rewards only productive resources
-must guard against market failures
3 economic questions
What? Based on tradition
How? Same as past
For Whom? Customs and traditions of sociey
What? Central authority (govt)
How? Central authority
For Whom? Central Authority
What? Individuals (consumers and producers)
How? Individuals
For Whom? Individuals

6. Characteristics of Free Enterprise and Capitalism
Economic Freedom
People choose jobs and spend $
Businesses choose what to make and sell and price
Voluntary Exchange
Buyers and sellers may engage freely and willingly in market transaction
Private Property
People may control their possessions as they wish
Profit Motive
People and organizations may improve their material well-being by making money

7. Assessment:
Create three illustrations or comic strips that demonstrate the basic components of each of the economic systems.
Once illustration or comic strip per economic system.
Complete for HW and turn in tomorrow…