1. Miss Smith 7 th Grade Civics *pgs. 450-458

2.  Help people create and obtain the goods and services they need

3.  The want-satisfaction chain- the process of obtaining goods and services to satisfy your wants  How people access goods and services is what makes each economic system different

4. 3 Basic Economic Systems:  Traditional  Command  Market

5. Traditional  Based on how economic activity has been carried out in the past Command  Government makes all economic decisions Market  Economic decisions made by the people

6.  In a free market, competition among sellers is the main factor in setting prices

7.  Competition for Resources  Scarcity can make products expensive and hard to obtain  Choice  Supply and Demand

8.  Production is owned by private citizens  Encourages people to invest their money in their own companies or the companies owned by others

9.  The government gives subsidies (or money) to certain industries so that people can afford the products they produce  Ex: The gov. gives subsidies to wheat farmers so that the farmers don’t have to charge a lot for their wheat to make a profit. As a result, products using wheat (bread, flour, etc.) is cheaper also

10.  Conglomerate- businesses that have joined together to form huge organizations