Name:_______________________________
Period:_______
Types of Economies Activity
Read about your assigned economy type below. With your assigned group, you will design a skit that
will show the rest of the class what that economy system is like. The skit needs to be 1-2 minutes long
and school appropriate. Everyone in the group must be involved in some way. Your group will then
explain how your skit represented the key parts of the economic type.
What is economics?
Economics studies how individuals and societies seek to satisfy needs and want through incentives,
choices, and allocation of scarce resources.
Nations must answer 3 basic economic questions for an economy to work:
1. What goods and services should be produced?
2. How should the goods and services be produced?
3. For whom should the goods and services be produced?
Type of Economy: Traditional Economy
The basic economic questions are answered by what has been done in the past.
Traditions, rituals, habits, and customs are maintained
A traditional economy is mainly found in rural areas with hunter/gather societies
Individual roles and choices are defined by the customs of elders and ancestors which govern the
economic decisions being made
Sharing is a big part of these economies
Farming, hunting, and gathering are done the same way as the generation before
Economic activities are centered around the family or ethnic unit
Men and women are given different economic roles and tasks
What to produce?
Usually what is needed to take care of yourself/family
How to produce?
How it was produced in the past
For whom to produce?
Usually for yourself and household
What are some advantages?
What are some disadvantages?
Name:_______________________________
Period:_______
Nations must answer 3 basic economic questions for an economy to work:
1. What goods and services should be produced?
2. How should the goods and services be produced?
3. For whom should the goods and services be produced?
Type of Economy: Command Economy
The basic economic questions are answered by the government or central authority. They make all
decisions and determine how resources will be used.
There is little individual freedom
There is no competition
Businesses are not run to create a profit
Consumers have few choices in the market place
Government dictates the job in which you work
Government sets the prices of goods and services
Factories are concerned with meeting quotas (a daily/weekly/monthly/yearly goal)
What to produce?
What the government says to produce
How to produce?
How the government decides as they own all factories
For whom to produce?
For whomever the government tells you to produce (ideally the entire society)
What are some advantages?
What are some disadvantages?
Name:_______________________________
Period:_______
Nations must answer 3 basic economic questions for an economy to work:
1. What goods and services should be produced?
2. How should the goods and services be produced?
3. For whom should the goods and services be produced?
Type of Economy: Pure Market Economy
The basic economic questions are answered by the people. There is no government involvement in any
economic decisions.
Also called a Free Market Economy
Businesses and consumers decide what they will produce and purchase and in what quantities
Decisions are made according to the law of supply and demand
Supply and demand of goods and services determines what is produced and how much things cost
There is no Pure Market Economy anywhere in the world
What to produce?
Customers decide this through what they purchase
How to produce?
Individual businesses decide on this, but businesses must be profitable
For whom to produce?
For people who have money and can buy more
What are some advantages?
What are some disadvantages?
Name:_______________________________
Period:_______
Nations must answer 3 basic economic questions for an economy to work:
1. What goods and services should be produced?
2. How should the goods and services be produced?
3. For whom should the goods and services be produced?
Type of Economy: Mixed Economy
A combination of a market and a command economy in which the government takes care of people’s
needs while the marketplace takes care of people’s wants.
Government and individuals share the decision making process
Government guides and regulates production of goods and services offered
Individuals own means of production
Protects consumers and workers from unfair policies
Most effective economy for providing a range of goods and services
Some government involvement through mandatory laws and regulations that businesses follow (labor
laws, minimum wage, etc.)
The government provides social programs for those who need help (medicare, welfare, etc.)
All economies (except North Korea) are mixed. They are classified based on how much the government
is involved in the process
What to produce?
The people can decide what they want to produce, as long as the government does not already provide
it.
How to produce?
However the people decide they want to produce, as long as it follows government regulations.
For whom to produce?
For whomever is willing to buy.
What are some advantages?
What are some disadvantages?