1. Goals- Stability, freedom, security, equity,
growth, efficiency.

2. 3 Economic Questions
1) What will be produced with
our resources?
2) How will these goods be
produced?
3) For whom will we produce
these goods?

3. Social & Economic Goals
Freedom
Security
Equity
Growth
Efficiency
Stability

4. Traditional Economy
 Based on social customs and tradition.
 Land and occupations are passed from generation to
generation.
 Think hunters/gatherers, subsistence farmers, &
people generally living the way they always have.
 Examples: Papua New Guinea (native people), Amish
people, Eskimos of Alaska

5. Command Economy
Prices and supply of goods are regulated by the
government, not the markets
Decide what and how goods are produced, and
how they are distributed.
Soviet Russia
North Korea

6. Cont…
No private ownership
So, not much competition in services or
profit motivation
(Work harder so can make more $$$)

7. Answers the Questions
What- Anything the government feels
is needed
How- However the government
deems necessary
For whom- Anyone the government
says needs a certain good.

8. Goals
Does not meet broad economic goals
of freedom, equity (fairness), growth
Security, Efficiency, and stability are
met

9. Market Economy
Sometimes called “free/open market”
Based on the Division of Labor (who makes
the product)
Prices rise and fall with supply and
demand
However, there is not really such a thing
as a totally “free market” in the world
today. Governments set regulations in all
markets.
Black Market?

10. Cont…
Consumer sovereignty-(Freedom to
choose) People determine what is produced
and the prices by their demand
Profit motivation is a main component &
competition is seen everywhere

11. Answers the Questions
What- Whatever is needed/
demanded by the people in society
How- However businesses deem it
necessary. (Privatization)
For whom- Consumers, Governments,
anyone that pays!!!!

12. Goals
Freedom is huge in market systems
Equity (fairness of competition) harder to
find
Growth and efficiency are seen as well,
provided people are buying your product
Stability and security a bit more shaky-
determined by sale/popularity of your
product

13. Mixed Economic System
Private and governmental control
Most economies fall in this category
(China, U.S., Mexico)
Privately owned industry mixed with
government economic planning

14. Cont..
Private and governmental ownership, so competition
still present
Profit motivation seen as well

15. Answers the Questions
What- Whatever the
public/government feels is needed
How- Private Businesses/
Specialized industries
For Whom- Whoever needs it

16. Goals
Stability, growth and efficiency are
seen and based on the public
Freedom can be more regulated than
in a Market Economy
Equity set mostly by
Govt. programs.
(min-wage)