1. Economic Systems Cy-Woods HS 2012-2013

2. Economic Systems The way people produce and exchange goods and services.The way people produce and exchange goods and services. How basic needs are met.How basic needs are met. Tied to a country’s political system.Tied to a country’s political system.

3. THE CHALLENGE Unlimited Wants S carcity Limited Resources

4. Scarcity A shortage or a limited amount of resources.A shortage or a limited amount of resources.

5. Factors of Production Who controls these?Who controls these?

6. Distribution How should goods and services be distributed?How should goods and services be distributed? Supply and demand, by the government, or somewhere in between?

7. Traditional Economy Goods and services traded without exchanging money.Goods and services traded without exchanging money. “Bartering”“Bartering” Habit and customsHabit and customs determine the rules for all economic activity.

8. Cottage Industries Individuals or families produce good for sale in their home.Individuals or families produce good for sale in their home. Often part of a traditional economy.Often part of a traditional economy.

9. Modern Economic Spectrum Communism Free EnterpriseSocialism more government less government

10. Communist Economy Also known as command or planned economyAlso known as command or planned economy ex) Cuba and North Koreaex) Cuba and North Korea

11. Communist Economy Government controls the factors of production.Government controls the factors of production. determine job, own the land, etc.determine job, own the land, etc.

12. Communist Economy Government determines the distribution of goods and services. ration food/supplies, who can own what

13. Communist Economy Government provides all basic needs.Government provides all basic needs. healthcare, shelter, etc.healthcare, shelter, etc.

14. Free Enterprise (Capitalism) Also known as market or capitalist economyAlso known as market or capitalist economy ex) U.S.ex) U.S.

15. Free Enterprise (Capitalism) Private ownership of factors of production.Private ownership of factors of production. People own the land, businesses, money, etc.People own the land, businesses, money, etc.

16. Free Enterprise (Capitalism) Consumer demand controls production and distribution. things are made because people want them market

17. Free Enterprise (Capitalism) Government provides few/no basic needs.Government provides few/no basic needs. social programs, welfare, etc.social programs, welfare, etc.

18. Socialism Also known as mixed economyAlso known as mixed economy ex) France, India, *Chinaex) France, India, *China

19. Socialism Major factors of production owned by government.Major factors of production owned by government. energy, healthcare, etc.energy, healthcare, etc. private owners tooprivate owners too

20. Socialism Distribution of goods and services determined by both. a blend

21. Socialism Government provides some basic needs.Government provides some basic needs. healthcare, more extensive social programs, welfare, etc.healthcare, more extensive social programs, welfare, etc. Emphasis on “being fair” to all.Emphasis on “being fair” to all.

22. Which would be an example of a free enterprise (market) economy? A. Trading a bear skin for some shoes.A. Trading a bear skin for some shoes. B. Someone selling you a $100 pair of shoes because you think they look cool.B. Someone selling you a $100 pair of shoes because you think they look cool. C. The government mandating that only athletic shoes be made and that they are to be sold for $20.40.C. The government mandating that only athletic shoes be made and that they are to be sold for $20.40. D. You buying the only pair of shoes available because the government makes it difficult for other shoe companies to get started.D. You buying the only pair of shoes available because the government makes it difficult for other shoe companies to get started.