1. Economic Systems

2. What is Economics? Basic questions of Economics: 1.What will be produced? 2.Who will produce it? 3.For whom will it be produced?

3. Tradition! Traditional economy: 1.Decisions based on custom and historical precedent 2.People perform the same work as parents, regardless of ability or potential

4. Command Command Economy: 1.Public Sector (Government) owns all resources 2.Public sector centrally plans economy 3.Lack of consumer choice

5. Free Markets Free Market Economy: 1.Private sector (individuals & business) ownership of all property and resources 2.Profit (earnings) motive 3.Competition (rivalry between producers results in better quality at lower prices) 4.Consumer Sovereignty (people determine what is produced, by what they purchase) 5.Individual Choice 6.Minimal government interference (people can succeed or fail)

6. Mixed Mixed Economy: 1.Private Sector: Individuals and businesses are owners and decision makers 2.Public Sector: Government is also an owner/decision maker 3.Role of government is larger than in a free market economy, but smaller than in a command economy 4.Most economies are mixed in some part, including the U.S.

7. Mixing it up U.S. Market Characteristics 1.Free Markets 2.Prices determined by supply and demand 3.Private property respected 4.Competition 5.Consumer Sovereignty 6.Contract enforcement

8. Land of the free? United States Public Sector: 1.Government regulations to protect public health and safety 2.Oversees how individuals and companies do business 3.EPA (Environmental Protection Agency), FCC (Federal Communications Commission), and FTC (Federal Trade Commission), and other federal agencies make and carry out these regulations