A
organized way in which a society provides for the wants and needs of its people
Economic system -
use of scarce resources and economic activity is based on habit or custom. Things are done how they always have been.
traditional economy—
Cuba, North Korea, and Soviet Russia are all part of a
Command Economy
When the factors of production are privately owned and used to generate profits .
Capitalism
–High degree of individual freedom
–Adjusts gradually to change over time
–Small degree of government interference
–Large variety of goods and services
Market Economies
•Three major economic systems exist:
–Traditional
–Command
–Market
A central authority (government) makes the major decisions in a
command economy
Most economies in the real world are
mixed economies.
is a political / economic system in which the government owns and controls some factors of production.
Socialism
The political ideology of communism is often associated with a......
Command Economy
Buyers and sellers exchange goods and services in a market.
market
allows people to make decisions in their own best interest based on supply, demand, and the price system
A market economy
the factors of production are privately owned and used to generate profits .
Capitalism
Communism is an economic / political system in which all factors of production are collectively owned / controlled by the state / government.
Communism
The political ideology of Socialism is often associated with a......
Mixed Economy
The Sentinelese are part of a
Traditional Economy
Customs and traditions determine who is provided for in a
Traditional Economy
–Individuals generally not free to make decisions
–New ideas discouraged, leading to stagnation and a lower standard of living
–Lack of technology / medications
Traditional Economies
Basic wants and needs of consumers are ignored.
Economies tend to be unproductive, not producing a good product.
Individual freedom and initiative are limited.
Black markets – overpriced, fake, dangerous
Command Economies
The political ideology of Capitalism is often associated with a......
Free Market Economy
Advantages
Everyone knows which role to play.
Little uncertainty on what or how to produce.
Self sufficient.
Traditional Economies
China has a ________________ economy
socialist market economy
True or False
•There is both state-owned enterprises and public ownership.
True
In a _______________, consumers and businesses jointly answer the questions of WHAT, HOW, and FOR WHOM to produce.
market economy
The Factors of Production include...
Land
Capital
Labor
Entrepreneurs