Economic Systems
Grade
Level:
9-12
Subject:
American Government
Prepared By:
Robyn Baney
Overview & Purpose
Education Standards Addressed
SWBAT identify, analyze and compare the various types of economic
systems: Command, Market,Traditional, and Mixed.
EXPECTATION
1. The student will demonstrate understanding
of the structure and functions of government
and politics in the United States
Describe the various economic systems.
Vocabulary
Command Economy
Market Economy
Mixed Economy
Traditional Economy
Economy
Communism
Capitalism
Resources
Scarcity
Capital
Objectives
(Specify
skills/information that
will be learned.)
Information
(Give and/or
demonstrate necessary
information)
Students will be able to differentiate
between the various economic systems
Students will be able to recognize the
elements of the various economic
systems through scenarios/ descriptions
Students will watch the video, Return to
Mocha, for an overview of the types of
economic systems. Students will take
notes on a graphic organizer using words,
pictures or symbols to describe each
economic system. Students will be
prepared to discuss.
Materials Needed
 Paper
 Pencil
 Crayons, colored pencils, markers
 Computer access
 Smartboard
 Construction paper for vocabulary foldables
Students will take notes from a
powerpoint presentation (modified from
the MSDE website) on the elements of the
major types of economic systems.
Verification
(Steps to check for
student understanding)
Activity
(Describe the
independent activity to
reinforce this lesson)
Students will be asked, verbally, to
demonstrate that they understand key
vocabulary during the notes/handout
section. As a class, we will complete a
short worksheet to ensure understanding
using scenarios to demonstrate
understanding.
Students will have two choices. They can
either complete a webspiration to
demonstrate their understanding of
economic systems or they may complete
paper-based picture definitions. For
extra credit, students can create
flashcards using flashcardminer.com.
Other Resources
(e.g. Web, books, etc.)




Computer with internet access
http://www.studyminder.com/flashcards.htm
l vocabulary terms
www.youtube.com
Webspiration account
Summary
Day 1- Students will begin the lesson with
an HSA released question for their warmup. After going over warm-up, students
will watch the video, The Return to
Mocha, to get an overview of economic
systems. Students will take notes during
the video using words, symbols or
pictures. Following the video, the teacher
will lead a class discussion and assess
understanding of the material covered in
the video. As a closing activity, students
will complete a foldable using the key
vocabulary that was introduced in the
video.
Day 2- Students will begin the lesson with
an HSA released questions for their
warm-up. After going over the warm-up,
the students will take notes from a
powerpoint presentation (based on a
modified MSDE lesson) on types of
economies. The teacher will direct
students through the types of economies
worksheet practice to ensure
understanding. As a culminating activity,
students will demonstrate understanding
by completing a webspiration or paperbased picture definitions.
Day 3- The students will be assessed with
a short quiz of HSA style questions to
unsure understanding.
Additional Notes
Prior knowledge of the meaning of the basic
economic questions is necessary. Students need
to understand what it means when asked what to
produce, when to produce, and for whom to
produce.
Graphic Organizer to be used with video Return to Mocha. Students can use words, symbols or pictures to take notes as
they watch the movie.
Type of
Economy
Free Market
(Mocha)
Traditional
(Oregano Island)
Command
(Caraway Island)
Mixed
(United States)
Characteristics
Graphic organizer to be completed from reading or Powerpoint notes.
Types of Economies
Traditional
Economy
What to Produce?
How to Produce?
For Whom to
Produce?
Strengths and
Weaknesses of
this system
Command
Economy
Market Economy
Reading to complete notes. Students can chose to take the notes from the powerpoint or the reading.
Types of Economies
Traditional Economy
In a traditional economy, economic questions are answered by what happened in the past, by customs,
and by tradition. The economy will produce what was made in the past, will make it the way it was made in
the past, and the same people will receive what was made in the past.
Individuals who live in traditional economies live comfortably. However, these economies typically lack many
productive resources. These individuals and society exist at a level where they only produce enough to live on.
If there is not enough produced for sustaining the group, some people may leave the society or die. If there is
overproduction and extras were created, the extras will still be distributed based on the traditions.
Traditional economies are found in remote areas, such as the Guatemalan highlands, the Brazilian rainforest,
the Himalayan Mountains, or Indonesian jungles. These groups generally focus their activities on hunting,
fishing, or farming.
Command Economy
In a command economy, the government answers the four basic economic questions. The government
prepares detailed plans about what to produce, how to produce it, how much to produce, and for whom to
produce it.
Historically, China, the former Soviet Union, and Eastern Europe relied on command economies. However,
problems with meeting production goals such as shortages and surpluses caused economic instability in these
countries. The government planners often ignored the needs and wants of the people when developing plans.
Environmental abuses also caught up with many of these countries. Trade pressures from other countries in the
global market forced additional change.
Today, Cuba and North Korea operate under a command economy.
Market Economy
In a market economy, buyers and sellers answer the four basic economic questions.
A market economy is a lot like casting a vote for a political candidate. When buyers go to the store and
buy goods and services, they are choosing the goods and services they want. If producers want to make
money, they will interpret what the buyers want. When producers make correct interpretations of the
market, they will produce the things that buyers want and demand in the correct quantities.
If the producers make too little or too much of a good or service, they will not make a profit. Producers
are motivated to make a profit when selling their goods and services. Sometimes this desire to make
money has led to business abuses, such as poor quality goods and services, illegal business activity, and
paying workers low wages. In addition, buyers' wants and desires are always changing and sometimes
these changes occur quickly. Producers often can not keep up with buyers and their businesses fail.
Today, the United States and Japan operate market economies.
Practice worksheet to be completed as a class after the students have taken Powerpoint or reading notes.
Name__________________________
Types of Economies Practice
Use the reading and your chart to determine which type of economy the following statements are describing and why.
Write T for traditional, C for command, and M for market.
1. Ralph becomes a police officer because his father was one as were all of the men in his family. Which type of
economy is being described?
a. Traditional
b. Command
c. Market
Explain why:
2. Alice thinks Burtonsville needs a discount computer store so she decides to start her own business. Which type of
economy is being described?
a. Traditional
b. Command
c. Market
Explain why:
3. Troy decides not to buy a new car because it costs too much. Which type of economy is being described?
a. Traditional
b. Command
c. Market
Explain why:
4. A planning commission decided how much coal should be produced. Which type of economy is being described?
a. Traditional
b. Command
c. Market
Explain why:
5. Doctors are employed by the state and their fees are set by the government. Which type of economy is being
described?
a. Traditional
b. Command
c. Market
Explain why:
6. The software for the new computer system was sold to the company that offered the highest price. Which type of
economy is being described?
a. Traditional
b. Command
c. Market
Explain why:
Use the reading and your chart to determine which type of economy the following statements are describing. Write T for
traditional, C for command, and M for market.
1. The first harvest of grapes went, as is custom, to the elders in the town.
2. The first harvest was sold to the Sour Grapes Company since they offered the highest price.
3. The Federal Farm Bureau, a government agency, gave all of the first harvest to the northern counties.
4. At the auction the first harvest was sold to the highest bidders- a group of foreign businessmen.
5. The first harvest fell short of the planners’ goals and concerns about how to continue the plan have developed.
Quiz to assess student understanding of material.
Quiz 6.1
Name____________________________________
1. A company decides to build a new factory and hire more workers. Which economic question is being directly
addressed?
A.
B.
C.
D.
what to produce.
how to produce.
for whom to produce.
how much to charge
2. A traditional economy is an economic system
A.
B.
C.
D.
that exists mainly in underdeveloped countries.
made up of elements of command and free market economies.
dominated by government regulation.
dominated by individuals competing for profits.
3. Which of the following is a characteristic of a free market economy?
A.
B.
C.
D.
the government guarantees full employment.
business decisions are controlled by government committees.
most economic decisions are based on cultural traditions.
individuals are allowed to privately own businesses.
4. In which of the following economic systems does the government decide what products will be sold to consumers?
A.
B.
C.
D.
mixed economy.
traditional economy.
command economy
free market economy.
5. Which of the following is most commonly a role of the government in the United States economy?
A.
B.
C.
D.
setting prices for goods.
requiring factories to produce certain goods.
determining where citizens may work.
creating laws to ensure the safety of workers