The World of the
Market Economy
Copyright © Texas Education Agency, 2011. All rights reserved.
Page 1
“Copyright and Terms of Service
Copyright © Texas Education Agency. The materials found on this website are copyrighted © and trademarked ™ as
the property of the Texas Education Agency and may not be reproduced without the express written permission of the
Texas Education Agency, except under the following conditions:
1) Texas public school districts, charter schools, and Education Service Centers may reproduce and use copies of the
Materials and Related Materials for the districts’ and schools’ educational use without obtaining permission from the
Texas Education Agency;
2) Residents of the state of Texas may reproduce and use copies of the Materials and Related Materials for individual
personal use only without obtaining written permission of the Texas Education Agency;
3) Any portion reproduced must be reproduced in its entirety and remain unedited, unaltered and unchanged in any
way;
4) No monetary charge can be made for the reproduced materials or any document containing them; however, a
reasonable charge to cover only the cost of reproduction and distribution may be charged.
Private entities or persons located in Texas that are not Texas public school districts or Texas charter schools or any
entity, whether public or private, educational or non-educational, located outside the state of Texas MUST obtain written
approval from the Texas Education Agency and will be required to enter into a license agreement that may involve the
payment of a licensing fee or a royalty fee.
Copyright © Texas Education Agency, 2011. All rights reserved.
Page 2
Vocabulary
Supply: The amount of
goods and services that
producers will provide at
various prices.
Copyright © Texas Education Agency, 2011. All rights reserved.
Page 3
Vocabulary
Demand: The amount or
quantity of goods and
services that consumers are
willing to buy at various
prices.
Copyright © Texas Education Agency, 2011. All rights reserved.
Page 4
Vocabulary
Equilibrium Price: The
price at which the amount of
supplied and the amount
demanded meet.
Copyright © Texas Education Agency, 2011. All rights reserved.
Page 5
The Nature of Supply and
Demand
Supply and demand are always
changing. Technology, recession,
getting hired, getting fired…all play a
part in when and how the supply and
demand of a product change. A
hurricane can cause a huge demand
with low supply, only to see
equilibrium in the market after
hurricane recovery.
Copyright © Texas Education Agency, 2011. All rights reserved.
Page 6
Vocabulary
Profit Motive: The desire
to make more money.
Copyright © Texas Education Agency, 2011. All rights reserved.
Page 7
Economic Systems
Traditional Economy
~
Family or community
based system
~
Relies on custom and
ritual to make its choices
~
Examples: Aborigines,
Amazon Tribes
Copyright © Texas Education Agency, 2011. All rights reserved.
Page 8
Economic Systems
Command Economy
~
Centrally controlled
~
Government makes all
decisions
~
Examples: Cuba, North
Korea
Copyright © Texas Education Agency, 2011. All rights reserved.
Page 9
Economic Systems
Market Economy
~
Some government
involvement
~
Relies on consumption
choices of its consumers
~
Examples: USA, Canada
Copyright © Texas Education Agency, 2011. All rights reserved.
Page 10
Review
• Identify each economic system
and give characteristics and
examples.
Copyright © Texas Education Agency, 2011. All rights reserved.
Page 11
Review
• Define:
Supply
Demand
Equilibrium
Copyright © Texas Education Agency, 2011. All rights reserved.
Page 12
Review
• Give an example of a change in
the supply and demand of a
particular market. Explain the
factors that lead to the change.
Copyright © Texas Education Agency, 2011. All rights reserved.
Page 13