how to produce

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SS7E1a
Compare how traditional, command,
and market economies answer the
economic questions of
(1) what to produce
(2) how to produce
(3) for whom to produce
Concept:
Production – Distribution - Consumption
ECONOMIC SYSTEMS
TRADITIONAL
ECONOMIC
SYSTEMS
MARKET
COMMAND
SS7E1b
Explain how most countries
have a mixed economy located
on a continuum between pure
market and pure command.
Concept:
Production – Distribution - Consumption
ECONOMIC CONTINUUM
PURE MARKET
ECONOMY
MIXED
ECONOMY
PURE COMMAND
ECONOMY
• Individuals and
private businesses
DECIDE what is
produced, how it is
produced, and who
they will sell to
• Individuals and
private businesses
AND governments
DECIDE what is
produced, how it is
produced, and who
they will sell to
• The Government
DECIDES what is
produced, how it is
produced, and who
they will sell to
SS7E1c
Compare and contrast
the economic systems in
South Africa and Nigeria.
Concept:
Production – Distribution - Consumption
Private sector – run by people
 Government sector – run by
the govt.

Economy of South Africa

What to produce?

A large part of South Africa’s GDP comes from a highly
developed, privatized enterprise system much like
many other developed countries. The private sector is
based on mining, agriculture, services, and
manufacturing.
Due to problems in the past (Apartheid), the
government operates a large part of the social services
sector and maintains state-run enterprises in housing,
business development, education, and healthcare.

Economy of South Africa

How to produce?

In the developed sector, private businesses and
consumers make production decisions based
on market principles (supply and demand).

The Reconstruction and Development Plan
designed as a blueprint for providing social
services is run by a number of government
agencies.
Economy of South Africa

For whom to produce?

The private sector produces goods and
services for domestic and international markets
based on the market price system.

The government social services sector
produces public goods and services based on
the needs of the population throughout the
country.
Economy of Nigeria

What to produce?

Major industry is petroleum production followed by
agriculture.

Business development is difficult because of corruption
and poor government supervision of markets.

Estimates say 75% of Nigeria’s economy is in the
informal sector and not counted in the GDP.
Economy of Nigeria

How to produce?

After years of government control, the country’s
major industries are increasingly becoming
privatized, including the petroleum industry and
banking sector.

Corruption and lack of infrastructure cause
production inefficiencies.
Economy of Nigeria

For whom to produce?

46% of Nigeria’s daily oil production is exported
to the United States.

Due to an overvalued currency, Nigerians
import many consumer goods. Many domestic
manufacturers have been unable to compete
with cheap imports and have closed.
ECONOMIC CONTINUUM
Where do the economies of
South Africa and Nigeria fall on an
economic continuum?
?
PURE MARKET
ECONOMY
?
MIXED
ECONOMY
PURE COMMAND
ECONOMY
ECONOMIC CONTINUUM
Where do the economies of
South Africa and Nigeria fall on an
economic continuum?
South
Africa
PURE MARKET
ECONOMY
Nigeria
MIXED
ECONOMY
PURE COMMAND
ECONOMY
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