The document outlines four different economic systems: traditional, command, capitalism/market, and mixed. It provides details about each system, including how they answer the "big three" economic questions of what to produce, for whom to produce it, and how to produce it. A traditional economy bases production and allocation on customs and rituals. A command economy centrally plans all economic decisions. A market economy relies on consumer demand and entrepreneurial responses to demand. A mixed economy incorporates aspects of the other systems, like some government involvement and consumer driven aspects.

1. Agenda
• Bellringer/Review Activity
• Notes: Economic Systems
• Should the US become more socialist?

2. Practice – identify FOP
• Tools you own?
• Area in yard where you plant vegetables?
• Lawn mower to cut grass?
• Workers hired to plant beds?
• Knowledge and skills from college?
• Water and fertilizer used in garden?
• Combining all elements to begin landscape biz?
• Effort you exert in tending your garden?
• What does Guns and Butter model depict?

3. Target: Economic systems
• Essential Learning: Economic systems and theorists

4. Objectives
• Students will demonstrate an understanding of the “Big
Three” economic questions and how they apply to the four
economic types

5. The Big Three Questions
• Every economic system in the world, past and
present, has to answer these three questions:
• What to produce? (How did economists answer this
question?)
• For whom to produce it?
• How to produce it? (Who owns the factors of
production?)

6. 4 Different Economic Systems
• Traditional
• Command/Socialism
• Capitalism/Market
• Mixed

7. Traditional Economic System
• Economic system is based on customs and traditions
(handed down from 1 generation to another).
• Allocation of scarce resources stems from ritual, habit, or
customs
• BARTER!! Means trade! No money!
• Examples: Africa, parts of India, the Australian Aborigines

8. Examples of Traditional Economies
Aborigines
Inuits

9. Advantages Disadvantages
• Economic roles are set
• Stable, predictable,
and continuous
• Discourages new
ideas
• Lack of progress
• Lower standard of
living

10. Does a traditional economy answer the
big three questions?
• What will be produced?
• Whatever tradition, values, and rituals dictate
• How will it be produced?
• However tradition, values, and rituals dictate
• For whom will it be produced?
• Whomever tradition, values and rituals dictate

11. Command Economy
• A central authority (government)
has to answer the big three
questions
• Government decides the needs of
the people, the best way to produce
it and for everyone!

12. Command Economy
• There is very little if any input from the
people.
• Examples: North Korea, Cuba, China

13. Advantages Disadvantages
• Basic Needs taken
care of
• Education, public
health, other services
cost very little if
anything
• Very little
unemployment
• Doesn’t meet wants
• No incentives
• Requires a large
bureaucracy
• New and different
ideas are discouraged
• No room for
individuality

14. Does a command economy answer the
big three questions?
• What is being produced?
• Whatever the government decides
• How is it being produced?
• The government will tell someone to make it
• For whom is it being produced?
• Whomever the government decides needs it

15. Capitalism/Market
• System that relies on consumption choices made by
consumers
• Consumers dictate what is produced, how much is
produced, and how much things cost

16. Capitalism/Market
• Examples: Canada, South Korea, Singapore, Germany,
Great Britain, and the UNITED STATES!

17. Advantages Disadvantages
• Individual Freedom for
all
• Lack of government
interference
• Incredible variety to
choose from
• High degree of
consumer satisfaction
• Rewards only productive
people
• Workers and businesses
face uncertainty
(Competition)
• Not enough public goods
(Education, health,
defense)
• Unemployment
• Must guard against market
failure

18. Answer the big three…
• What will be produced?
• Whatever the consumer wants
• How will it be produced?
• Entrepreneurs will respond to demand
• For whom will it be produced?
• Whomever is willing to work for it (or afford it)

19. Mixed Economy
• A mix of all of the other three economies
• Some government involvement, consumer driven,
aspects of economy based on traditional values
• This is really what the US is….
• Examples: Obama Care, Bail outs yet consumer
driven. Family owned stores and corporations.

20. Create a graphic organizer to help you remember each system
Market Command
Traditional
Mixed

21. Or maybe this…
Traditional Command Market Mixed

22. Classwork/Homework
• In a formal paragraph, tell me which economic system
you believe is the best. Consider your needs and
wants. All systems had their advantages and
disadvantages – which one do you support?