economic systems

1. GOALSGOALS
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ECONOMICECONOMIC
SYSTEMSSYSTEMS
 List the three economic questions that must be
answered by every society.
 Describe three types of economic systems.
 Identify five features of our market economy.
 Explain why economies are mixed systems.
 Explain why market economies are becoming
common around the world.
Chapter 2

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KEY ECONOMICKEY ECONOMIC
QUESTIONSQUESTIONS
What to produce?
How to produce?
For whom to produce?

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TYPES OFTYPES OF
ECONOMIC SYSTEMSECONOMIC SYSTEMS
Custom-based (Traditional) economy
Directed (controlled or planned)
economy
Market (free) economy
https://www.youtube.com/watch?v=5xgwYRX

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Custom/TraditionalCustom/Traditional
EconomyEconomy
“Do it like your daddy does”
Goods are produced the way thay have
always been, through generations
Farming, agriculture
Amish

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Directed/CentrallyDirected/Centrally
Planned/ControlledPlanned/Controlled
EconomyEconomy
Resources are owned and controlled by
the government.
Freedom of the people is limited.
North Korea

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Market (Free) EconomyMarket (Free) Economy
The 3 economic questions are
answered by the consumer.
Consumers and businesses make
economic decisions based on their own
interests.
Hong Kong

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America’s EconomyAmerica’s Economy
Which of the 3 economic systems is
present in America?

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Our Economic SystemOur Economic System
Capitalism- economic resources are
usually privately owned by individuals
rather than the government. Individual
owners are free to decide what they will
produce.
Free/Private Enterprise

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OUR ECONOMIC SYSTEMOUR ECONOMIC SYSTEM
Private enterprise- limited government
direction
Private property- you can own things of
value
Profit
Competition
Freedom of choice

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OUR ECONOMIC SYSTEMOUR ECONOMIC SYSTEM
Government stays out of the exchange
activities
Individual consumers make decisions
about what will be purchased to satisfy
needs

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MIXED ECONOMICMIXED ECONOMIC
SYSTEMSSYSTEMS
An economic system usually gets its
name from the way its economic
resources are owned and controlled.
Most countries have mixed economic
systems.

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EMERGING MARKETEMERGING MARKET
ECONOMIESECONOMIES
The economic success of market
economies has caused many countries
to reexamine their economic systems.
The weakness of controlled economies
have caused many nations to change to
market or mixed economies.

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Private Corporations &Private Corporations &
Public GoodsPublic Goods
Should a private company be employed
to provide public goods?
https://www.youtube.com/watch?v=Mq2iQAs
(7 min)