This document defines key economic concepts and compares different economic systems. It begins by defining economics as the study of how scarce resources are used to meet wants and needs. An economic system is defined as how a society addresses basic questions of what, how, and for whom to produce goods and services. The main types of economic systems discussed are traditional, market, command, and mixed. Their key characteristics and advantages/disadvantages are summarized. Traditional systems rely on customs, while command systems involve central government planning and market systems use supply and demand. Mixed systems blend public and private aspects.

1. ECONOMICS: ECONOMIC
SYSTEMS
BY DINEO NKAWANE.

2. LEARNING OBJECTIVES:
Definition of the economy.
Definition of economic system.
Types of economic systems.
The types of economic systems addressing the three questions in
the economy.
Characteristics, advantages and disadvantages of the types of
economic systems.

3. What is economics?
ECONOMICS is the social science that analyzes the production,
distribution and consumption of goods & services. {by Shoresinha, A.
(2011) }
Economics is the study of how individuals and societies make decisions
about ways to use scarce resources to fulfil wants and needs. {Michael. N
(2012) }
ECOMOMICS is the study of choices that we make everyday.

4. What is economy? continue
Economics is the science which studies human behavior as a
relationship between given ends and scarce means which
have alternative uses.(Robbins, L)
WHAT IS ECONOMIC SYSTEM?
Economic System is the system of production, distribution and
consumption.

5. What is economic system? cont.
An economic system is a mechanism (also defined as system or social
institution) which deals with the production, distribution and consumption
of goods and services in a particular society.
An economic system is the way in which country try to solve the questions
of what should be produced, with what and by whom. (Chaplin, C.
Serfontein, B. Van zyl, C. (2012) solution for all ECONOMICS. Published by:
Macmillan South Africa.

6. BASIC CONOMIC CHOICES:
• WHAT goods and services should be produced?
• HOW should the goods and services be produced?
• WHO receive and consume these goods and services?
(Yucub13 published on Feb. 10 2012. published in: Technology,
Economy and Finance available on slide share)

7. BASIC ECONOMIC CHOICES
TYPES OF
ECONOMIC SYSTEM.
WHAT TO PRODUCE? HOW TO PRODUCE? FOR WHOM TO
PRODUCE?
Traditional economic
system
 Determined by
tradition.
 Economic roles often
passed from
generation to
generation.
 Determined by
custom.
 Usually centered
around traditional
family and social
units such as tribe.
Command economic
system
 Determined by
government officials.
 Determined by
government officials.
 Determined by
government officials.
Market economic
system
 Determined by  Determined by  Determined by

8. Types of economic systems:
1. Traditional economic system

people are expected to do what their parents did.

9. Traditional economic system continue
People are rich or poor based on their social level.
It is based on culture and tradition.
Activities in traditional economy:
farming
gathering/ hunting
herding

10. 2. Market economic system

11. Market economy continue:
Market is a place where buyers and sellers meet to exchange goods and services
with medium of exchange(money).
Market economy system is an economy where private individuals take their own
decisions with less government intervention.

12. 3. Command economic system
In a command economy the resources are owned and controlled by government.
The government decides what and how goods are produced, distributed and
shared.
Personal economic freedom is limited much like communism

13. 4. Mixed economic system
Mixed economy combine the elements of command and market economies.
There are various degree where government involvement exist.
Traditional economy will develop into this kind of economy.

14. CHARACTERISTICS OF TRADITIONAL
ECONOMIC SYSTEM.
Are found in rural, non developed countries.
Technology is not used in traditional economies.
Economic activities are usually centered towards the family or
ethnic unit.
Men and women are given different economic roles and tasks.

15. ADVANTAGES AND DISADVANTAGES OF
TRADITIONAL ECONOMIC SYSTEM.
ADVANTAGES DISADVANTAGES
 Clearly answers three economic questions.  They resist change.
 Little disagreement on economic goals.  Lower standard of living.
 Higher occupancy and better engagement of
people within the community.
 Prevent people to do what they want.
 sense of pride.  Lack of progress lead to lower standard of
living.
 Self sufficiency.

16. CHARACTERISTICS OF MARKET
ECONOMY
Resources are owned by individuals.
Economic decisions are made by individuals competing to
make profit.
There is individual freedom
Economic decisions are determined by the demand and supply

17. ADVANTAGES AND DISADVANTAGES OF
MARKET ECONOMY.
ADVANTAGES DISADVANTAGES
 Freedom of choice.  Poverty still exist.
 Control of the economy.  Because of profit motive there is always self
interest.
 Monopoly power can be monitored and
controlled.
 Excessive government spending may results in
inefficiency.

18. CHARACTERISTICS OF COMMAND
ECONOMY.
Government makes the decision.
Change can occur easily.
There is little individual freedom.
There is no competition.

19. ADVANTAGES AND DISADVANTAGES OF
COMMAND ECONOMY.
ADVANTAGES. DISADVANTAGES
 Equal distribution of income.  Shortage of consumer goods and services.
 There is no wastage caused by competition.  Lack of consumer choice because of lack of
competition by producers.
 The state provides all social services.  Low economic growth.

20. CHARACTERISTICS OF MIXED ECONOMIC
SYSTEM.
Democracy and freedom exist.
Competition exist between businesses.
Government intervene and passes laws to improve the running
of the economy.
There is public and private ownership of businesses.

21. ADVANTAGES AND DISADVANTAGES OF
MIXED ECONOMIC SYSTEM.
ADVANTAGES. DISADVANTAGES.
 Freedom of choice.  Poverty still exist.
 There is control of the economy.  Because of profit motive there is always self
interest.
 Improved social welfare.  Excessive government spending may results in
inefficiency.

22. SUMMARY AND CONCLUSION.

23. REFERENCES.
Griffin, K.L. (2010) How do economic systems answer the basic economic questions. Available from slide share at
https://www.slideshare.net/klgriffin/how-do-economic-systems-answer-the-basic-economic-questions (accessed on
18 September 2017).
Griffin, K.L. (2011) Characteristics of economic systems. Available from slide share at
https://www.slideshare.net/klgriffin/characteristics-of-economic-systems (accessed on 18 September 2017).
Shoresinha, A. (2011) Capitalism, Socialism & Mixed economy. Available from slide share at
https://www.slideshare.net/amitkishoresinha/capitalism-socialism-mixed-economy?qid=bad9c284-5f10-442f-a555-
cb37d7bc1bcd&v=&b=&from_search=15 (accessed on 18 September 2017).

24. REFERENCES CONTINUE
Yacub13. (2012) Types of economic systems. Available from slide share at
https://www.slideshare.net/yacub13/types-of-economic-systems?qid=bad9c284-5f10-442f-a555-
cb37d7bc1bcd&v=&b=&from_search=12 (accessed on 18 September 2017).
Chaplin, C. Serfontein, B. Van zyl, C. (2012) solution for all ECONOMICS. Published by: Macmillan South Africa.
Coil, B. (2008) The four types of economic systems. Available from slide share at
https://www.slideshare.net/Geckos/the-four-types-of-economic-systems-presentation?qid=bad9c284-5f10-442f-
a555-cb37d7bc1bcd&v=&b=&from_search=11 (accessed on 18 September 2017).
www.google.co.za
Short, J. (2011) Economic Systems. Available from youtube at
https://www.youtube.com/watch?v=d8ivuSUfTg4&t=608s

25. REFERENCES CONTINUE
www.youtube.com
https://www.google.co.za/search?q=pros+of+traditional+economy&rlz=1C1JZAP_enZA706ZA708&source=lnms&t
bm=isch&sa=X&ved=0ahUKEwjskeau-q7WAhVpCMAKHRkIAm0Q_AUICigB&biw=1366&bih=672#imgrc=z-
UVpNwLraOq6M
http://www.econlib.org/library/Enc/bios/Robbins.html
https://www.google.co.za/search?q=thank+you+images

26. THE END!