Types of Systems
An economic system is
the way society distributes and produces resources (using scarce resources for unlimited wants)
Any place or situation in which people buy and sell goods and services
Market
_____ is a must while _____ is a luxury.
Need, Want
The most common economic systems are
traditional, command, and market
Benefits offered to encourage people's actions
Incentives
What does TINSTAAFL stand for?
There Is No Such Thing As A Free Lunch
Individual choices drive the economy, not government. Which economic system is this?
Market Economy
When individuals or businesses concentrate their efforts in the areas where they have an advantage for increased productivity and profit
Specialization
List the factors of production.
Land, labor, capital, and entrepreneurship.
Society's leaders (central government) make all economic decisions. Which economic system is this?
Command Economy
Buyers are free to buy from anyone or anywhere
Consumer Sovereignty
What is the condition to which resources are being used to produce the maximum amount?
Efficiency
Families, clans, or tribes make economic decisions based on customs and beliefs. Which economic system is this?
Traditional Economy
Economic system based on private ownership of the factors of production
Capitalism
The graph used to illustrate the impact of scarcity on an economy by showing the max amount produced using limited resources
Production Possibilities Curve