1. Economic Systems
Traditional Command Market
Description
Advantages
Disadvantages

2. Give a description of a mixed economy:
Traditional Command Market Mixed
Country Examples

3. Identify the seven Major Economic and Social Goals and give a brief explanation of each.

4. Characteristics of Free Enterprise and Capitalism
Define Capitalism:
Define Free Enterprise:
Use the chart on page 47 to complete

5. Traditional Command Market
Economic Systems
Traditional Command Market
Allocation of scarce resources stems from ritual, habit, or customs. (social Behaviors)
Central authority makes decision on:
What to produce, How to produce, and for who to produce decisions
People and firms act on their own best interest to answer: What to produce, How to produce, and for whom to produce
Little government intervention
Economic Roles for all members
Stable, predictable and continuous life
Change in a short period of time
Basic education, public health and public services at little or no cost
Able to adjust to change
Individual Freedoms
Decentralized decision making
Variety of goods and services
Consumer satisfaction
Discourages new ideas and new ways of doing things
Lack of progress
Low Standard of Living
Does NOT meet wants and needs
Lacks Incentives
Large Bureaucracy
Little Flexibility to deal with day to day changes
New ideas are discouraged
Rewards only productive resources
Competition and change
Does NOT provide public goods: universal education and public health
Guard against market failures
Description
Advantages
Disadvantages

6. Inuits of NA and Aborigines North Korea Cuba US* Canada Japan US China
Give a description of a mixed economy:
People carry on economic affairs freely, but are subject to some government intervention and regulations.
Traditional Command Market Mixed
Inuits of NA and Aborigines
North Korea
Cuba
US*
Canada
Japan US
China
France
Country Examples

7. Identify the seven Major Economic and Social Goals and give a brief explanation of each.

8. Furthers the goal of economic equality because its fair.
Conflicts with goal of full employment by raising unemployment
Conflicts with goal of economic freedom by preventing employers from paying what they feel is a fair wage
Explain how in increase in the minimum wage might involve a conflict of goals.
People choose their own occupations, employers, and uses for their money; producers choose where and how they produces things etc
Describe some of the economic choices people and producers in the US are free to make.

9. Characteristics of Free Enterprise and Capitalism
Define Capitalism: private citizens (entrepreneurs) own the factors of production
Define Free Enterprise: competition is allowed to flourish with a minimum of government influence
Economic freedom:
People choose their jobs, employers, and how to spend their money
Businesses choose what products to sell and what for charge for them
(work nights, days, indoors etc. ) accept and reject jobs
Voluntary Exchange
Buyers and sellers freely and willing engage in market transactions
Both B+S are better off after the exchange
Value products or save it
Cash is more valuable then the product sold
Private Property
Rights:
People own and control their
Possessions as they wish
Tangible = houses and cars
Intangible = skills and talent
Free to make decisions about their property and their abilities
Incentive to work, save, and invest
Not afraid to use, accumulate, or lend it
Profit Motive
People and organizations
May improve their material
well being by making money
Profit: persons or organizations are better off at the end of a period then they were at the beginning
Competition:
Producers and sellers compete with one another to attract consumers, while lowering cost. Consumers compete with one another to obtain the best product at the lowest cost
TV’s, Houses, Cars
Use the chart on page 47 to complete

10. Entrepreneurs Consumers Government
What is the ROLE of Entrepreneurs, Consumers, and Government in the Economy?
Entrepreneurs
Consumers
Government
Organize and Manage: Land, capital, and Labor to gain a profit
Start new businesses, auto repairs, restaurants, etc
Want to “Be their OWN boss”
Willing to take a RISK
Many fail, others succeed, VERY FEW become wealthy and famous (Walt Disney)
“American Dream”
Improve quality of products and cut prices
Introduce: new products, greater competition, more production, higher quality and lower prices
Have power because they determine which products are ultimately produced (if we like a product it will sell)
Consumer Sovereignty: sovereign ruler of the market
The customer is always right
Wants change constantly (i.e. computers, cell phones etc)
Involved because Americans want them involved
Protector: enforce laws (i.e. false advertising; abuse of individual freedoms
Protects property, enforces contracts, and generally tries to make sure follow the “rules of the game.”
Provider and Consumer
Nat’l – defense services
State- education and public welfare
Local – parks, libraries, and bus services