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Economic systems2


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Economic systems2

  1. 1. What is an Economic System?
  2. 2. <ul><li>Opportunity cost- in order to have more of one thing; you must have less of another. Ex- more clothes, less money. </li></ul><ul><li>Scarcity- insufficiency or shortness of supply. </li></ul><ul><li>Medium of Exchange- An intermediary instrument used to facilitate the sale, purchase or trade of goods between parties. In modern economies the medium of exchange is currency. </li></ul>
  3. 3. <ul><li>Family oriented, self sufficient </li></ul><ul><li>Decisions are made according to customs (Family, Tribal, Religion) </li></ul><ul><li>Live off the land </li></ul><ul><li>Little technological influences </li></ul><ul><li>Each member has a role </li></ul>
  4. 4. <ul><li>Where might we find a “Traditional Economy”? </li></ul>
  5. 6. <ul><li>Govt makes all economic decisions </li></ul><ul><ul><li>What, where, and how to produce products </li></ul></ul><ul><ul><li>Control of resources, factories, workers, and retail </li></ul></ul><ul><ul><li>Control over production and price </li></ul></ul>
  6. 7. <ul><li>Can you think of any “Command Economies”? </li></ul>
  7. 9. <ul><li>Individuals make economic decisions according to supply and demand </li></ul><ul><ul><li>Driven by choice </li></ul></ul><ul><ul><li>Profit drives decision making </li></ul></ul><ul><ul><ul><li>Determines how resources are used </li></ul></ul></ul><ul><li>Creates competition </li></ul>
  8. 10. <ul><li>Combines ideas of Command and Market Economies </li></ul><ul><ul><li>Production is usually privately owned </li></ul></ul><ul><ul><li>Govt regulates and guides the economy </li></ul></ul>
  9. 11. <ul><li>Can you think of any examples of economic competition/restrictions in Lawrence? </li></ul>