2.  How do economic systems answer your basic economic questions?

3.  What to produce  How to Produce  For whom to produce

4.  Answers the basic economic questions by rituals, habits, religious beliefs, and customs

5.  Individual roles are determined the elders  Examples: herding cattle, hunting and gathering, subsistence farming

10.  There is little or no uncertainty- everyone knows the role they play  Life is generally stable, predictable, and continuous

11.  Tends to discourage new ideas and new ways of doing things  Lack of progress lowers the standard of living

12.  1. What to produce?  Whatever customs and traditions dictate

13.  2. How to produce?  Whatever customs and traditions dictate

14.  3. For whom to produce?  Whatever customs and traditions dictate

15.  Basic Economic Questions are answered by the government

16.  Only two Command Economies left in World- Cuba and North Korea

17.  It is associated with communism and socialism

20.  The government has total control over production and its factors, thus the economy can change rapidly. Whatever is needed most will be produced

21.  Example is collective farms which are owned and operated by the central government. Money made goes to the government

22.  Free education, free healthcare, and other public services

23.  Economy is designed to meet needs not wants  There is no incentive to work hard—people don’t often lose their jobs so they do the bare minimum

24.  Economy supports a large bureaucracy (government) which means decision making is slow, costs of production are high, and there is no flexibility

25.  There is no reward for initiative

26.  1. What to produce?  Whatever the government says to produce

27.  2. How to produce?  However the government tells you to produce

28.  3. For whom to produce?  For whomever the government tells you to produce

29.  Basic economic questions are answered by consumers

30.  Laissez-faire is a pure market economy meaning “allow to do”. The government has little or no power in what is produced or sold.

31.  Free-enterprise system- business owners set their own prices and sell their own goods.

32.  Adjusts to change based on consumer wants  High level of individual freedom  Low level of government interference

33.  Because individuals make the decisions, everyone has a voice in the way economy runs

34.  Wide variety of available goods and services  Many choices=high degree of consumer satisfaction

35.  Poverty: only those with money can participate

36.  Market does not provide for people’s basic needs. Government must attempt to do this (Think about Katrina)

37.  High degree of uncertainty: people lose their jobs and businesses fail

38.  Greed based system puts profits before people (think about loss of jobs here. What caused it?)

39.  Are they truly Free market economies?  Does the government regulate businesses?  Does the government control any businesses?

40.  1. What to produce? Directed by the consumers.

41.  2. How to produce? Companies decide cheapest and most efficient means of production.

42.  3 For whom to produce? The consumer that has the ability and money to afford the companies product.

43.  An economy is considered a mixed economy when there are characteristics of more than one economy evident.  For example, the United States is a mixed economy because there are privately owned businesses that operate on their own like a market system but they are regulated by the government also.