Economic Systems Intro

Economic systems answer the three questions:  1) What to produce, 2) How to produce, and 3) For who to produce.

There are 3 basic types of economic system:
Traditional
Command
Market

TRADITIONAL:
Families, clans, etc make decisions and answer the 3 Questions based on decisions handed down from generation to generation.
-goal-survival
 - everyone has a set role
 - group more important than the individual

Command Economy
The government answers the 3 questions.
-government officials look at the resources and decide how they are going to be used
-the government owns all the means of production  (natural resources, factories, etc)
-ex:  North Korea, Cuba, Soviet Union

Market economy
Based on individual choice, not what the government decides.
Producers answer the questions, based on what they know about consumers.
Consumers decide what they want to spend their money on.
Economy SURVIVES based on producers & consumers working together.


Assignment:

In groups of 3-4, make a mini-poster, illustrating the characteristics if one the three economies and how one how they answer the 3 economic questions.  Then summarize your findings in a paragraph.