2.01 Economic SystemsCompare different types of economic systems:
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The document discusses different types of economic systems: 1) Traditional economies rely on customs and focus on family/ethnic units with distinct gender roles. 2) Market economies rely on supply and demand with businesses and consumers deciding production and purchases. 3) Command economies involve central government planning with the state controlling production and allocation of resources. 4) Mixed economies combine elements of market and command with government providing needs and markets providing wants. Most nations utilize a mixed system.
2.01 Economic SystemsCompare different types of economic systems:
- 1. 2.01 Economic Systems Compare different types of economic systems: traditional, free enterprise, command and mixed. haaaaa ha ilyy
- 2. What is economics???? Economics studies how individuals and societies seek to satisfy needs and wants through incentives, choices, and allocation of scarce resources. Â TECHNOLOGY OIL & FUEL Â Â Â Â Â Â Â Â Â Â LAND Â Â Â Â DOCTORSSSS
- 3. FACTORS OF PRODUCTION. Economic Resources Natural Resources – raw materials found in nature that are used to produce goods Human Resources – people’s knowledge, efforts, and skills used in their work Capital Resources – used to produce goods and services (buildings, materials, and equipment) Entrepreneurial Resources - recognize the need for new goods or service Scarcity – shortage of resources Â
- 4. WHY ECONOMIC SITUATIONS>3??? Nations use economic systems to determine how to use their limited resources effectively. Primary goal of an economic system is to provide people with a minimum standard of living, or quality of life. Different types of Economic Systems Traditional Economy Market Economy (free enterprise) Command Economy Mixed Economy
- 5. MARKET ECONOMYY free enterprise Also called a Free Market Economy or Free Enterprise Economy Businesses and consumers decide what they will produce and purchase and in what quantities Decisions are made according to law of supply & demand Supply and demand of goods and services determine what is produced and the price that will be charged. Advantage—competition to have the best products and services Disadvantage—huge rift between wealthy and poor Note: a true market economy does not exist.
- 6. TRADITIONAL EXONOMY Found in under-developed countries Customs govern the economic decisions that are made Farming, hunting and gathering are done the same way as the generation before Economic activities are centered around the family or ethnic unit Men and women are given different economic roles and tasks Advantages : people have specific roles; security in the way things are done Disadvantages : Technology is not used; difficult to improve
- 7. Command Economy The government determines what, how, and for whom goods and services are produced. Strong Command – where government makes all decisions (communism – China, Cuba, North Korea) Moderate Command – where some form of private enterprise exists but the state owns major resources (socialism – France and Sweden) Advantages Guarantees equal standard of living for everyone Less crime and poverty Needs are provided for through the government Disadvantages Minimal choices, Fewer choices of items No incentive to produce better products  Also known as a Planned Economy
- 8. M I X E D E C O N O M Y Combination of a market and a command economy Government takes of people’s needs Marketplace takes care of people’s wants. Most nations have a mixed economy: United States, England, Australia Advantage—balance of needs and wants met by government and in marketplace Disadvantage—citizens have to pay taxes