28Basic Economic Questions What and how much to produce?How to produce goods and services?Who will get what is produced?The type of economy a govt. has is determined by how it answers the above questions.
30Market Economy Characteristics Private ownership of property and resourcesProfitCompetitionConsumer sovereigntyIndividual choice
31What and how much to produce? Answered by consumer sovereignty and supply and demand.
32How to produce goods and services? Determined by individual business owners
33Who will get what is produced? Those with higher paying jobs will buy more of the goods and services than those who don’t.
34Command Economy Characteristics Central (govt.) ownership of property and resources.Centrally-planned economyLack of consumer choice
35Basic decisions answered by the government In this type, the government owns important parts of the economy and they decide what and how much of a product will be produced.The “goods” usually go to a dictator or are split up equally among the citizens.
36Mixed Economy Characteristics Individuals and businesses as decision makers for the private sectorGovernment as decision maker for the public sectorA greater government role than in a free market economyMost common economic system today
37Modern – Day EconomiesToday most economies are mixed, or they contain a mixture of command and market economies.
45Individuals (households) own the resources used in production, sell the resources, and use the income to purchase products.
46Businesses (producers) buy resources; make products that are sold to individuals, other businesses, and the government; and use the profits to buy more resources.
47Governments use tax revenue from individuals and businesses to provide public goods and services.
48Consumers pay for goods and services received Individuals and businesses provide resources (land, labor and capital) that businesses use to create goodsBusinesses sell their goods to consumers in the market place.taxesPublic goods and servicesConsumers pay for goods and services receivedProducers pay for resources received
49Characteristics of Private Financial Institutions Include banks, savings and loans, credit unions, and securities brokeragesReceive deposits and make loansEncourage saving and investing by paying interest on deposits
50Ways the government promotes marketplace competition Enforcing antitrust legislation to discourage the development of monopoliesEngaging in global tradeSupporting business start-ups
51Government agencies that regulate business FCC (Federal Communications Commission)EPA (Environmental Protection Agency)FTC (Federal Trade Commission)