ECONOMIES OF THE
WORLD!
… and the questions they each
have to answer.
Intro to
Econom
ics
Question one!
• What should we produce?
– Food?
– Clothing?
– Shelter?
– Entertainment items/services?
– Healthcare?
– Education?
Question two!
• How do we produce it?
– By hand?
– In factories?
– Small businesses?
– Big businesses?
– Do adults make the products?
– Do children make the products?
Question three!
• Who are we producing it for?
– Everyone?
– Only the rich people?
– Only the poor people?
– Only for certain groups?
Market Economy
Question one!
• What should we produce?
– Whatever people will buy.
Market Economy
Question two!
• How do we produce it?
– Whatever way is cheapest!
Market Economy
Question three!
• Who are we producing it for?
– Whoever will buy it
– If no one will buy it, we won’t produce
it (supply & demand)
Command Economy
Question one!
• What should we produce?
– What the government thinks people
will need
Command Economy
Question two!
• How do we produce it?
– By assigning jobs to the citizens
– By using whatever capital resources
available (including older factories and
machines)
Command Economy
Question three!
• Who are we producing it for?
– We are producing it for every citizen, so
everyone can have an equal amount
Public vs. Private
Businesses
Public
• Businesses owned by the
government.
• Examples: Court houses,
schools, post office, fire
stations, police stations.
Private
• Privately owned
businesses.
• Entrepreneurs
• NOT government operated.
• Examples: retail stores,
grocery stores (Wal-Mart,
Target, Publix)
Traditional Economy
Question one!
• What should we produce?
– The basics! The most basic things
necessary to live.
Traditional Economy
Question two!
• How do we produce it?
– Mostly by hand or using basic tools.
Traditional Economy
Question three!
• Who are we producing it for?
– Ourselves, our families, or to barter if
we have too much
What is the difference between
commercial and subsistence farming?
Commercial Farming
• Growing enough food
to feed large
populations.
• *Think: Commercials
on TV” sell to large
amounts of people.*
Subsistence Farming
• Survival Farming;
enough for themselves
or their families.
Entrepreneur
• The person responsible for bringing the
human, capital, and natural resources
together to start a business.
Human Resources
(Capital): Workers
with knowledge,
skills, and experience
to make goods and
provide services.
(Examples: Teachers,
Cashiers)
Capital Resources:
Machines,
factories, supplies
(Examples: cash
register, oven)
Natural Resources:
Raw materials to
make goods-found in
nature, such as:
land, water, forests,
minerals, soil.
(Example: tree,
fruit)
Economics
• Goods: Products(footballs, make-up,
iPods, computers)
• Services: An action performed for
money (example- doctor,
hairdresser)
• Consumer: Person who buys and
uses goods and services.
• Producer: Person who makes or
provides services.
Specialization vs. Diversification
• Specialization
• Diversification