The document compares different types of economic systems: traditional, free market, command, and mixed. It defines each system and provides examples. A traditional economy relies on customs and family ownership. A free market economy uses supply and demand with minimal government. A command economy has the government control production and distribution. Most countries now use a mixed economy with public and private aspects.

1. Comparing different types of economic systems:
traditional, free enterprise, command and mixed.

2.  Economics studies how individuals and societies seek
to satisfy needs and wants through incentives,
choices, and allocation of scarce resources.
Technology
Land
Oil & fuel Doctors

3.  Na tions mus t a ns we r thre e ba s ic Economic
que s tions :
 Wha t goods a nd s e rvice s s hould be produce d?
 How s hould the goods a nd s e rvice s be produce d?
 For who s hould the goods a nd s e rvice s be produce d?
 The wa y a na tion a ns we rs the s e que s tions
de fine s the ir e conomy.

4. Scarcity forces all Scarcity leads to
countries to answer conflict
these 3 questions

5.  Economic Resources
 Natural Resources – raw materials found in nature
that are used to produce goods
 Human Resources – people’s knowledge, efforts, and
skills used in their work
 Capital Resources – used to produce goods and
services (buildings, materials, and equipment)
 Entrepreneurial Resources - recognize the need for
new goods or service
 Scarcity – shortage of resources

6.  Nations use economic systems to determine
how to use their limited resources effectively.
 Primary goal of an economic system is to
provide people with a minimum standard of
living, or quality of life.
 Different types of Economic Systems
▪ Traditional Economy
▪ Market Economy (free enterprise)
▪ Command Economy
▪ Mixed Economy

7.  Defined: An economic system that does
things as it always has
 Ownership of Resources: All productive
resources are owned by families
 Allocation of Resources: Based of customs
and traditions within the tribe
 Role of Government: Tribes play some role in
making economic decisions

8.  Found in rural, under-  Economic activities are
developed countries– centered around the family or
 Vanuatu ethnic unit
 Pygmies of Congo  Men and women are given
 Eskimos & Indian tribes different economic roles and
tasks
 Belarus
 Advantages: people have
 Customs govern the specific roles; security in the
economic decisions that are way things are done
made  Disadvantages: Technology is
 Farming, hunting and not used; difficult to improve
gathering are done the same
way as the generation
before

9.  Goals: Keep things how they have always been
 Methods: Customs and traditions passed down
through family lineage
 Characteristics: Children follow in parent’s
footsteps, lack of economic growth
 Current Examples:
Aborigines Australia Mbuti Pygmies of the Congo Kung Bushmen of Africa
 Political System: Tribal Organizations

10.  Also called a Free Market  Supply and demand of goods
Economy or Free Enterprise and services determine what
Economy is produced and the price that
 Businesses and consumers will be charged.
decide what they will  Advantage—competition to
produce and purchase and in have the best products and
what quantities services
 Decisions are made  Disadvantage—huge rift
according to law of supply & between wealthy and poor
demand  Note: a true market economy
does not exist.

11.  Allocation of Resources: Resources are
obtained through the lure of profits in the
market
 Role of Government: Government only tries
to make sure there is some competition and
provides some public goods

12.  Goals: Profit for individuals, people are motivated
by economic rewards
 Methods: Competition, supply and demand
 Characteristics: Private property, specialization,
minimal government regulation
 Political System: Democracy/Parties
 Current World Examples:
Switzerland Canada Australia Chile Argentina South Africa

13.  An e conomic s ys te m cha ra cte rize d by priva te
owne rs hip of bus ine s s e s a nd ma rke tpla ce
compe tition
 The gove rnme nt is conce rne d a bout its pe ople
a nd ta ke s ca re of thos e who ca nnot ca re for
the ms e lve s
 The politica l s ys te m is a de mocra cy with le a de rs
e le cte d by the pe ople
 The Unite d S ta te s a nd J a pa n a re e xa mple s of a
Ca pita lis t Economy

14.  The government (or central  Advantages
authority) determines what,  Guarantees equal standard of
how, and for whom goods living for everyone
and services are produced.  Less crime and poverty
 Two types:  Needs are provided for
 Strong Command – where through the government
government makes all  Disadvantages
decisions (communism –  Minimal choices
China, Cuba)  Fewer choices of items
 Moderate Command –  No incentive to produce better
where some form of private product or engage in
enterprise exists but the entrepreneurship
state owns major resources
(socialism – France and  Also known as a Planned or
Sweden) Managed Economy

15.  Goals: Equal distribution of income
 Methods: Revolution to gain control, no opposition
forces allowed
 Characteristics: no private property, one political
party
 Political System: Totalitarian
 Current and Former World Examples:
Cuba North Korea China Former Soviet Union

16.  The gove rnme nt runs e ve rything (Tota lita ria n
gove rnme nt)
 Only one politica l pa rty, the Communis t pa rty,
runs the gove rnme nt
 All pe ople a ble to work a re a s s igne d jobs – the re
is virtua lly no une mployme nt
 The gove rnme nt a s s igns hous ing, s chools , a nd
occupa tions
 The re is little to no e conomic fre e dom
 Cuba , North Kore a , a nd China a re e xa mple s

17.  Combination of a  Most nations have a mixed
market and a economy: United States,
command economy England, Australia
 Government takes of  Advantage—balance of
people’s needs needs and wants met by
government and in
 Marketplace takes care
marketplace
of people’s wants.  Disadvantage—citizens
have to pay taxes

18.  Incre a s e d gove rnme nt involve me nt in pe ople ’s
live s a nd the e conomy
 The ma in goa l is to ke e p price s low for a ll pe ople
a nd to provide e mployme nt for ma ny
 The gove rnme nt runs ke y indus trie s a nd ma ke s
e conomic de cis ions
 More s ocia l s e rvice s for a ll a nd fre e or low cos t
me dica l ca re
 Ca na da , Ge rma ny, S we de n, Aus tra lia a nd Gre a t
Brita in a re a ll e xa mple s of s ocia lis t e conomie s

19. Command Economy S ocialism Market Economy
Com unism
m Left of center but right Capitalism
On the far left of communism On the far right

20.  The bre a kup of the S ovie t Union is the be s t
e xa mple of a country cha nging from a
Comma nd Economy to a Ma rke t Economy
 S ta te owne d indus trie s ha ve be e n priva tize d
(gove rnme nt owne d bus ine s s e s a re s old to
priva te citize ns )
 Toda y e ve n s ocia lis t countrie s a re s e lling s ome
of the ir gove rnme nt owne d bus ine s s e s to
individua ls