The Development of a Market Economy (Lesson 1)
I.
The Dollar Bill

What happened when the dollar bill was thrown on to the floor?

What explanation can you provide as to why this happened?
“INSTITUTIONS, INSTITUTIONS, INSTITUTIONS………. ______________________ the rules of
the game. “
Vocabulary:
Feudalism
Lord
Command Economy
II.
Manor
Centralized Gov’t
Traditional Economy
Guild
Market Economy
The Development of a Market Economy
In the feudal period, the social relationships between individuals as well as the
economic activity that existed was much different it is today. This reading will explain
how we moved from an economy based on Command and Tradition to one that was
determined by the Market and Demand for goods.
Directions: As a group, read the historical essay titled, “The Development of a
Market Economy.” As you read, respond to and complete the following.
In the middle ages, all the economic decisions were made by…….
The catalyst for change toward a market economy came from a number of
directions. They included the……..
Travelling Merchants
What did they provide? How did this change
the economy?
Birth of Towns
What was created as a result? What impact
did this have on the manor and the guild?
Centralized Government
What impact did larger national government
have on the economy?
What did they do to encourage change
toward a market economy?
THE ROLE OF RELIGION
EXPLAIN HOW THE ATTITUDES OF RELIGIOUS INSTITUTIONS CHANGED TOWARD
THE ACCUMULATION OF WEALTH AND MONEY. (HINT: WHAT WAS THE MEASURE
OF ONE’S “WORTH.”
Comparing Social Classes: Draw or describe what the social classes would look like in
each time period. Who is at the top?………..who is at the bottom?
Feudal England
Industrial England (Modern)
THE THREE BASIC ECONOMIC PROBLEMS:
The 3 basic economic problems that society has to answer is…………
a.
b.
c.
THE MARKET ECONOMY:
Three advantages that a market economy provides are……
a.
b.
c.
In a market economy an employer determines a man’s pay according to……….
Even in the early development of a market economy governments exercised some
economic control by……..
a.
b.
Practice / Challenge:
Fold Your Paper Into 6 Equal Squares
Using Your Notes create a storyboard that tells the story of
how the market economy developed and the changes that
resulted from this change to a market economy.
Your storyboard should describe the difference between a
feudal economy and a market economy
a)
One Economic Change (How did the economy
change? Who made decisions as to what was
made?)
b)
One Social Change (How did the social classes
look different from the feudal period to the
industrial period
c)
One Political Change (What was the role of gov’t
in the feudal period vs. the industrial period)