Quick Draw: Pizza Party…its
just pizza how hard can it be?
How many and what
toppings?
 How
many Pizzas should we order for the
class???
 The School????
 All high schools in Georgia???
 All high schools in the USA????
Traditional
Market
Command
Economic
Systems of the
World.
What are the major types of
Economic systems ?
How does each answer the 3
Basic Economic Questions?
Traditional Economic Systems
Tradition, Tradition, Tradition
 What,
how and for whom to produce are answered by
ritual, habits, customs
 Tribal Societies Across the world
 Communal living, little private property
 Advantages
Disadvantages
 Methods Work
Subsistence living
Low standard of living
Discourages new ideas
Never changes
Command… ex: Communism
 Gov’t
answers 3 Basic Economic Questions
 No Private Property
Total Government Control
Rights
Government owns
all resources!!!!!
 Strengths
Weaknesses
Quick Changes
Basic needs met
Central Planning
Consumers Wants Ignored
Everyone know role
No incentives to work
Massive Bureaucracy
Day to Day Inflexibility
The Soviet Economy
 What
is the reason why people didn’t
work hard?
Circle the words that fit with
Command Economies
Lots of Choices
government housing
Economic freedom
Karl Marx
Merit Pay
Joseph Stalin
Cuba
Incentives to work
Basic needs met
Get what you need
Slow to change
No Technology Equal distribution of Wealth
Happy Consumers
Government control
Private Property
Fast to change
Day to day flexibility
Central Planning
North Korea Tribes
Adam Smith
Expansion of Communism

C
O
M
M
A
N
D
Market Economy: Capitalism
USA, Japan, UK, South Korea, South Africa, Canada
Mixed
Economy
KNOW YOUR ROLES!!!!!!!!!!!!!!!!!!!!
Modified Private
Enterprise Economy
The Entrepreneur
The Government
The Consumer
“The Spark plug of the
economy”
-risk takers
-innovators
-they organize the 4 factors
of production
Protector of consumers
Consumer Sovereignty
rights and freedom, private
- rulers of the market
property
- Answer the 3 basic
Provider of services like
questions
national defense, welfare,
education, public goods
Consumer of resources 2nd
largest only to citizens
Regulator of markets to
ensure competition and
safety, redistribute income,
limit market failures
Promoter of National
Goals
CONSUMER SOVEREIGNTY
WE RUN THIS ECONOMY!!!!!!!!!!!!
Market economies… ex:
Capitalism


People/individuals answer the What, How, For
Whom to Produce
Adam Smith- laissez faire “leave it alone”
Invisible hand of self interest
Strengths
Weakness
Flexible
Slow to change
Individual Freedom
Allows Failure
Winners/losers
Decentralized
decision making
Large Variety of Products
High consumer Satisfaction
Private Property Rights

Time to Think……
 How
would your life be different if you
lived in a market economy??
 It
would not be any different because you
currently live in a Market Economy….Silly
Stop, Collaborate and Listen
 What
are the similarities and differences
of market and Command Economies?
Command
What
would a
mix of
command
and
market
look like?
Market
China, Vietnam, Sweden, Venezuela
LETS MIX THINGS UP WITH
SOCIALISM!!!!!!
-Socialism is a blend of communism
and capitalism.
-The 3 Basic Economic Questions
are answered by the government and
individuals
-The government owns and controls
only key resources and industries
while individuals own the rest of the
resources and have private control of
most businesses
-Basic needs of the people are met by
the government
-People pay high taxes to fund things
like healthcare, insurance, and other
social services
Limited
-Economic Freedom
-Voluntary Exchange
-Profit Motive
-Private Property Rights
-There is a shared control of the
economy between the government and
people.
FILL IN THE BLANKS
Economic
System
Traditional
Market/
Capitalism
Command/
Communis
m
Socialism
Private
Ownership of
resources
Profit
Motive
Consumer
Sovereignty
Competition
Government
Regulation
redistributio
n of Wealth
Home work: Letter to a friend
 Boys,
You are living in a Command
economy, girls Traditional economic
systems.
 Write a letter to a friend living here in the
USA. Discuss how your lives are different.
Discuss what you like and do not like
about your economic system and if you
would prefer to live in the USA.
 ¾ to 1 page in length
Warm- UP - Review
 Describe
what each of the following
would look like in a traditional, command,
and market economy
 What
 How
 For
do you produce?
do you produce?
whom?