1. Do-First: Use the definition below to define an economic system.
Information on the production and exchange of goods among a group of people
SWBAT
Characterize components of economic systems by completing guided notes and reading system comparison notes.

2. Basic Economic Questions
A country must decide:
What is being produced?
How is it being produced?
For whom is it being produced?

3. Command Style Economic System
Communism
Socialism
Gov. sets economic goals, complete control
Workers labor together, share wages equally
No private property
Political and Economic Structure
Ex: North Korea
Mix of government and private ownership of businesses
Gov. often provides low-cost of free public services (schools, health care, etc.)
Ex: Norway

4. Market Economic System
Called capitalism
Consumers and producers decide what, how, and the # that will be produced
Prices set by supply and demand
Investment and entrepreneurs
Motivation = make a profit
Competition
Ex: United States

5. Traditional economic systems
Meet basic needs like ancestors
Based on customs and beliefs
Look to elders for decisions
Technology rarely used
Found in rural,
undeveloped countries

6. Mixed economy
NO country economy will fall perfectly into one of these categories.
Mixed economies will be a combination of the 3 major systems listed, but will have one that is dominant.

7. Subsistence vs Commercial Agriculture
Subsistence Agriculture-Small Scale
people make barely enough food for survival.
Example: People in developing countries
Commercial Agriculture-Large Scale
People make food for a profit. They send their goods to market.
Examples: Midwest Corn Production

8. Cottage Industry vs Commercial Industry
Cottage Industry-Small Scale
Home based production
Example:working out of your garage, supplying items for village (developing)
Commercial Industry-Large Scale
is factory based production
Example: steel refinery, assembly lines, mass production

9. Primary Activity “Get Stuff”
The 1st step  getting natural resources from the source
Involves mining, farming, forestry
Developing Nations (Lowest skill=Low GDP/Per Capita)

10. Secondary Activity “Make Stuff”
The 2nd step  send raw materials to:
Factories and Industry!
Make something with the resource
Newly Industrialized Nations (Mid Skill-Mid Range GDP Per Capita)

11. Tertiary Activity “Do Stuff”
The 3rd step  send product to store
They perform a service/do something for someone; accountants, lawyers, plumbers
Developed Nations (High Skill Set High GDP Per Capita)

12. Quaternary Activity “Think Stuff”
The 4th step  Take product and make it better!
Involves research and development of products
Cancer Research, NASA Engineers
Developed (Highest skill-Highest GDP Per Capita)

13. The Spectrum Some government interference
Government owns many businesses
Complete government ownership
Free Market Economy
Mixed Economy
Socialist Economy

14. Economic Systems Practice!
END
Tuesday
Economic Systems Practice!
What type of economic system would have mostly this activity?
Primary
Traditional (based on tradition, culture and family)
Secondary/Tertiary/Quaternary =
Command/Communism (government control)
Market/Free Enterprise (people control)

15. Do First: Get out handout to check
Start Wednesday
Do First: Get out handout to check

16. Reading Comparison
Using your Communism vs Capitalism and Communism vs Socialism Handout.
Read through the article. For each section find two points that compare the economic system being described.

17. Canvas Economic Systems quiz – Due by tomorrow night 11:59 PM
15 questions so don’t put off to last minute! DO NOW