2.01 Economic Systems Compare different types of economic systems: traditional, free enterprise, command and mixed. haaaaa...
What is economics???? <ul><li>Economics studies how individuals and societies seek to satisfy needs and wants through ince...
FACTORS OF PRODUCTION. <ul><ul><li>Economic Resources  </li></ul></ul><ul><ul><ul><li>Natural Resources  – raw materials f...
WHY ECONOMIC SITUATIONS>3??? <ul><ul><li>Nations use economic systems to determine how to use their limited resources effe...
MARKET ECONOMYY free enterprise <ul><ul><li>Also called a  Free Market Economy or Free Enterprise Economy </li></ul></ul><...
TRADITIONAL EXONOMY <ul><ul><li>Found in under-developed countries </li></ul></ul><ul><ul><li>Customs govern the economic ...
Command Economy <ul><li>The  government determines what, how, and for whom goods and services are produced. </li></ul><ul>...
M I X E D   E C O N O M Y <ul><ul><li>Combination of a market and a command economy  </li></ul></ul><ul><ul><li>Government...
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2.01 Economic SystemsCompare different types of economic systems:

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2.01 Economic SystemsCompare different types of economic systems:

  1. 1. 2.01 Economic Systems Compare different types of economic systems: traditional, free enterprise, command and mixed. haaaaa ha ilyy
  2. 2. What is economics???? <ul><li>Economics studies how individuals and societies seek to satisfy needs and wants through incentives, choices, and allocation of scarce resources. </li></ul><ul><li>  TECHNOLOGY OIL & FUEL            LAND      DOCTORSSSS </li></ul>
  3. 3. FACTORS OF PRODUCTION. <ul><ul><li>Economic Resources </li></ul></ul><ul><ul><ul><li>Natural Resources – raw materials found in nature that are used to produce goods </li></ul></ul></ul><ul><ul><ul><li>Human Resources – people’s knowledge, efforts, and skills used in their work </li></ul></ul></ul><ul><ul><ul><li>Capital Resources – used to produce goods and services (buildings, materials, and equipment) </li></ul></ul></ul><ul><ul><ul><li>Entrepreneurial Resources - recognize the need for new goods or service </li></ul></ul></ul><ul><ul><li>Scarcity – shortage of resources </li></ul></ul><ul><li>  </li></ul>
  4. 4. WHY ECONOMIC SITUATIONS>3??? <ul><ul><li>Nations use economic systems to determine how to use their limited resources effectively. </li></ul></ul><ul><ul><li>Primary goal of an economic system is to provide people with a minimum standard of living, or quality of life. </li></ul></ul><ul><ul><li>Different types of Economic Systems </li></ul></ul><ul><ul><ul><ul><li>Traditional Economy </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Market Economy (free enterprise) </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Command Economy </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Mixed Economy </li></ul></ul></ul></ul>
  5. 5. MARKET ECONOMYY free enterprise <ul><ul><li>Also called a Free Market Economy or Free Enterprise Economy </li></ul></ul><ul><ul><li>Businesses and consumers decide what they will produce and purchase and in what quantities </li></ul></ul><ul><ul><li>Decisions are made according to law of supply & demand </li></ul></ul><ul><ul><li>Supply and demand of goods and services determine what is produced and the price that will be charged. </li></ul></ul><ul><ul><li>Advantage—competition to have the best products and services </li></ul></ul><ul><ul><li>Disadvantage—huge rift between wealthy and poor </li></ul></ul><ul><ul><li>Note: a true market economy does not exist. </li></ul></ul>
  6. 6. TRADITIONAL EXONOMY <ul><ul><li>Found in under-developed countries </li></ul></ul><ul><ul><li>Customs govern the economic decisions that are made </li></ul></ul><ul><ul><li>Farming, hunting and gathering are done the same way as the generation before </li></ul></ul><ul><ul><li>Economic activities are centered around the family or ethnic unit </li></ul></ul><ul><ul><li>Men and women are given different economic roles and tasks </li></ul></ul><ul><ul><li>Advantages : people have specific roles; security in the way things are done </li></ul></ul><ul><ul><li>Disadvantages : Technology is not used; difficult to improve </li></ul></ul>
  7. 7. Command Economy <ul><li>The government determines what, how, and for whom goods and services are produced. </li></ul><ul><ul><li>Strong Command – where government makes all decisions (communism – China, Cuba, North Korea) </li></ul></ul><ul><ul><li>Moderate Command – where some form of private enterprise exists but the state owns major resources (socialism – France and Sweden) </li></ul></ul><ul><ul><li>Advantages </li></ul></ul><ul><ul><ul><li>Guarantees equal standard of living for everyone </li></ul></ul></ul><ul><ul><ul><li>Less crime and poverty </li></ul></ul></ul><ul><ul><ul><li>Needs are provided for through the government </li></ul></ul></ul><ul><ul><li>Disadvantages </li></ul></ul><ul><ul><ul><li>Minimal choices, Fewer choices of items </li></ul></ul></ul><ul><ul><ul><li>No incentive to produce better products </li></ul></ul></ul><ul><ul><ul><li>  </li></ul></ul></ul><ul><ul><li>Also known as a Planned Economy </li></ul></ul>
  8. 8. M I X E D E C O N O M Y <ul><ul><li>Combination of a market and a command economy </li></ul></ul><ul><ul><li>Government takes of people’s needs </li></ul></ul><ul><ul><li>Marketplace takes care of people’s wants. </li></ul></ul><ul><ul><li>Most nations have a mixed economy: United States, England, Australia </li></ul></ul><ul><ul><li>Advantage—balance of needs and wants met by government and in marketplace </li></ul></ul><ul><ul><li>Disadvantage—citizens have to pay taxes </li></ul></ul>

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