Class
/ per ____
Economic Systems
Name:
Date:
 Economics = the study of how societies produce (make), distribute (buy, sell, transport), and consume (use)
goods to meet the needs of their people.
Overview & Directions: In every society, people consume goods, the “stuff” people eat, wear, and use. All societies have to develop economic
systems to answer three basic questions. Fill in the chart below with the answers each of the economic systems has for each question.
Economic
System
Nomadic
What goods &
services shall be
produced and
in what quantities?
How shall goods and services
be produced?
For whom shall goods and
services be produced?
food &
basic goods
Hunting, gathering, & very
simple hand tools
The tribe of 30 – 40 people
(extended family)
Family farms use simple
hand tools to grow just
enough crops + animals to
survive.
Yourself + your family
(clothes, tools, etc.)
Subsistence
Farmers
(Traditional
Economy)
food &
basic goods
manor – a lord’s estate, which
included one or more villages &
surrounding lands
Manorialism
(Medieval Europe)
Noble / Lord =
landowner
↓↑
Serf = peasant bound
to land
food &
basic goods
Lords allow serfs to farm
their land & provides
protection. Lord receives
portion of crops & labor as
feudal dues
 Any extra goods may be bartered
with local artisans for goods or
sold to local merchants
Goods produced for
everyone on the manor
 Local trade carried on through
barter or basic money exchange
 Very little trade carried on with
other manors or travelling
merchants
Economic
System
What goods &
services shall be
produced and
in what quantities?
How shall goods and services
be produced?
For whom shall goods and
services be produced?
Colonies = raw
materials
Colonies seen as possessions of
European country & forbidden to
trade with other nations
Mother country makes profit and
gains benefits not enjoyed by
colonists
(16th – 19th century
Europe)
(sugar, tobacco, furs, lumber, etc)
Colonies = plantations produce
cash crops + other
raw materials
use of colonies
for trade to
make a profit
European (mother)
country =
manufactured goods
European (mother) country =
produces manufactured goods
(early factories develop)
“free market”
Food, raw materials,
basic goods,
manufactured goods
produced in mass
quantities for sale on
the “open market”
Mercantilism
Capitalism
(16th – 21st century)
Businesses are
owned individually
and run for profit
(19th – 21st century)
Big businesses are
owned by society
as a whole and
directed by the
government for
benefit of everyone
equally
Farmers and business owners
hire workers to produce goods
as cheaply as possible.
Quantities & prices of goods
determined by supply & demand
Ownership by whole society
“command economy”
Communism
Private Ownership
Food, raw materials,
basic & manufactured
goods produced in
manner directed by
government in
quantities determined
by government
(quotas).
Government directs large
businesses, factories, railroads,
etc., determining how, where,
and by whom goods are
produced by setting quotas.
Qualities & quantities of goods
to be produced determined by
government plan. Prices for
basic goods set by government.
Individually owned businesses
produce goods or services
based on demand for goods,
which are then sold for the
greatest possible profit without
government interference
Goods and services produced for the
society as a whole following a plan
created by the government.
Prices of basic goods are set at low
levels to ensure that all citizens can
afford them.
Communist economies are usually run
by dictatorships with only one political
party (i.e. the Communist Party).
Communist Party members receive
privileges and have access to goods
that regular citizens cannot get or
afford
Economics = the study of how societies produce (make), distribute (buy, sell,
transport), and consume (use) goods to meet the needs of their people.
Sumer inventions:
PLOW
WHEEL
IRRIGATION
LEVEES
WRITING
A FIEF is an estate that includes:
Land
Villages/building on the land
Peasants to work the land
A fief is given by the Lord to the Vassal.
A CAPITALIST economy must have a DEMOCRATIC government to be successful.
A COMMAND/COMMUNIST economy must have a TOTALITARIAN government to be
successful.
Domestication had to occur before an economy could switch to Traditional.
Job Specialization – when a worker performs only ONE job and is proficient at it.