Embed Size (px)
Citation preview
ECOMICS UNIT
Objectives Students will be able to describe
the types of economic systems
bull An economic system describes
how a society determines what
to produce how to produce and
for whom to distribute goods and
services
ECOMICS UNIT
ECOMICS UNIT
The primary goal of an economic system
is to provide people with a minimum
standard of living or quality of life
Types of Economic Systems
BusinessesBusinessesBusinesses
Most needy or most money
Scarcity Limited
Resources
Unlimited
Wants Choices
WHAT GS
to produce
WHO will receive
the GS produced
[Eskimopygmy]
Answers to the above determine
ECONOMIC SYSTEMS
BASIC
ECONOMIC
PROBLEMS
TRADITIONAL FREE MARKET COMMAND
HOW will the
GS be produced
ECOMICS UNIT
bull Basic economic questions answered by Ritual
Habit and Custom
bull Life in these economies tends to be stable
predictable and continuous
ECOMICS UNIT
bull Individual roles and choices are defined by the
customs of elders and ancestors
bull These economies are usually based in societies of
huntergatherers
bull Sharing is a big part of these economies
ECOMICS UNIT
bull Australian Aborigines
ECOMICS UNIT
ECOMICS UNIT
bull 1) What to produce Whatever ritual habit or
custom dictates
bull 2) How to produce However ritual habit or
custom dictate
bull 3) For whom to produce For whomever ritual
habit or custom dictate
ECOMICS UNIT
bull There is little or no uncertaintyhellipeveryone
knows what role to play
bull Life is generally stable predictable and
continuous
ECOMICS UNIT
ECOMICS UNIT
bull Tend to discourage new ideas and new ways
of doing things
bull Lack of progress lowers standard of living
bull Technology is not used difficult to improve
httpwwwyoutubecomwatchv=_iSHqUmzfKM How to build a yurt
ECOMICS UNIT
ECOMICS UNIT
Command Economy- Typically
begin with revolutions
ECOMICS UNIT
bull The government controls all aspects of the economy
bull Private property is illegal
bull Supply and demand are determined by the government not by consumers and producers
bull Everyone is paid equally no matter what job they do
bull Industry and businesses are owned and controlled by the government not private individuals
ECOMICS UNIT
In Cuba all residents are given rations of foods
Instead of purchasing food in a market Cubans go to
government food supply centers
ECOMICS UNIT
Cubarsquos Fidel Castro and Che Guevarra established a
command economy by expelling Cubarsquos small
business and land owners Many of those who lost
their business and freedom now live in Miami
ECOMICS UNIT
ECOMICS UNIT
ECOMICS UNIT
bull Because the government has total control
over production and its factors these
economies can change rapidly Whatever is
needed most will be produced
bull There is no uncertainty (people are told when
and how to work)
bull Free education health care and other public
services
bull 1) What to produce Whatever the government says to produce
bull 2) How to produce However the government tells you to produce
bull 3) For whom to produce For whomever the government tells you to produce (ideally the entire society)
ECOMICS UNIT
ECOMICS UNIT
bull Economy designed to meet needs not wants
bull No incentive to work hardhellippeople donrsquot often lose their jobs so they do the bare minimum to get by
bull Large bureaucracy means slow decision making raises cost of production lacks flexibility
bull No reward for initiative slows progress
Another disadvantage to the command economy
is that there is no incentive for
entrepreneurship when you canrsquot run your own
business
Why would people stand in line all day for one roll
of toilet paper
Moscow 1988
Command Economies
ECOMICS UNIT
Karl Marx provided the ideological foundation for this
system - most commonly known as communism
Stressed an economy controlled by the
government
You will buy
Govrsquot Inc Pizza
and you will like
it But itrsquos always
burnt I hate
their pizza
Government Inc Pizza
In a command economy consumers have very little
or no choice in what they can purchasehellip
Or even their occupation
I really enjoy workin on
the good ol farm
Not anymore you wont We need to
industrialize quickly You must move to
the city and work in the steel factory
ECOMICS UNIT
bull Basic economic questions answered by consumers
bull An economic system in which individuals own and
operate the factors of production
Adam Smith claimed that people who
trade with each other donrsquot go to war with
each other
ECOMICS UNIT
Market economies are based on the open
and free trade of goods
ECOMICS UNIT
bull USA Canada UK France etc etc
ECOMICS UNIT
bull Adjusts to change based on consumer wants
bull High degree of individual freedom
bull Low levels of government interference
bull Because individuals (with money) make the
decisions everyone (with money) has a voice in the
way the economy runs
bull Wide variety of available goods amp services
bull Many choices=high degree of consumer satisfaction
ECOMICS UNIT
bull Poverty only those with money can participate
bull Market does not provide for peoplersquos basic needs
Governments must attempt to do this (think
Katrina the tornado in Bridgeport etc)
bull High degree of uncertainty - people lose jobs
businesses fail
bull System at times puts profit before people
ECOMICS UNIT
In a pure market economy there is no government
involvement in economic decisions The government
lets the market answer the following three basic
economic questions
1 What Consumers decide what should
be produced in a market economy
through the purchases they make
ECOMICS UNIT
2 How Production is left entirely up to businesses
Businesses must be competitive in such an economy
and produce quality products at lower prices than
their competitors
3 For whom In a market economy the people who
have more money are able to buy more goods and
services
ECOMICS UNIT
ECOMICS UNIT
ldquoItrsquos Your money not the
governmentrsquosrdquo- President Ronald
Reagan
MARKETS
amp PRICES
FREEDOM OF
ENTERPRISE
amp CHOICE
PRIVATE
PROPERTY
ACTIVE BUT
LIMITED
GOVERNMENT
ROLE OF
SELF-INTEREST COMPETITION
ECOMICS UNIT
bull Are they truly Free Market Economies
bull Does the government regulate businesses
bull Does the government control any businesses
ECOMICS UNIT
Mixed economies combine both the private interests with the governmentrsquos interests Therersquos a balance to it bull Individuals and businesses make decisions for the
private sector
bull Government makes some decisions for the public
sector (ex regulation of monopolies)rlm
bull Governments role is greater than in a free-market
economy but less than in a command economy
bull Most economies in the world today are mixed
economies
Questional Peperoni Pizza Questional Cheese Pizza
In a Mixed Economy the government regulates
what goes into the goods we purchase in order
to protect us
And you can buy your pizza wherever you want
tohellip
bull Traditional economies only make up a small part of
a countryrsquos economy
bull There are NO PURE Market economies in the world
bull There are NO PURE Command economies in the
world
ECOMICS UNIT
All economies in the world have aspects
of both command and market
ECOMICS UNIT
All modern economies in the world are MIXED economies
But the mix is different in every nation
ECOMICS UNIT
bull An economic system describes
how a society determines what
to produce how to produce and
for whom to distribute goods and
services
ECOMICS UNIT
ECOMICS UNIT
The primary goal of an economic system
is to provide people with a minimum
standard of living or quality of life
Types of Economic Systems
BusinessesBusinessesBusinesses
Most needy or most money
Scarcity Limited
Resources
Unlimited
Wants Choices
WHAT GS
to produce
WHO will receive
the GS produced
[Eskimopygmy]
Answers to the above determine
ECONOMIC SYSTEMS
BASIC
ECONOMIC
PROBLEMS
TRADITIONAL FREE MARKET COMMAND
HOW will the
GS be produced
ECOMICS UNIT
bull Basic economic questions answered by Ritual
Habit and Custom
bull Life in these economies tends to be stable
predictable and continuous
ECOMICS UNIT
bull Individual roles and choices are defined by the
customs of elders and ancestors
bull These economies are usually based in societies of
huntergatherers
bull Sharing is a big part of these economies
ECOMICS UNIT
bull Australian Aborigines
ECOMICS UNIT
ECOMICS UNIT
bull 1) What to produce Whatever ritual habit or
custom dictates
bull 2) How to produce However ritual habit or
custom dictate
bull 3) For whom to produce For whomever ritual
habit or custom dictate
ECOMICS UNIT
bull There is little or no uncertaintyhellipeveryone
knows what role to play
bull Life is generally stable predictable and
continuous
ECOMICS UNIT
ECOMICS UNIT
bull Tend to discourage new ideas and new ways
of doing things
bull Lack of progress lowers standard of living
bull Technology is not used difficult to improve
httpwwwyoutubecomwatchv=_iSHqUmzfKM How to build a yurt
ECOMICS UNIT
ECOMICS UNIT
Command Economy- Typically
begin with revolutions
ECOMICS UNIT
bull The government controls all aspects of the economy
bull Private property is illegal
bull Supply and demand are determined by the government not by consumers and producers
bull Everyone is paid equally no matter what job they do
bull Industry and businesses are owned and controlled by the government not private individuals
ECOMICS UNIT
In Cuba all residents are given rations of foods
Instead of purchasing food in a market Cubans go to
government food supply centers
ECOMICS UNIT
Cubarsquos Fidel Castro and Che Guevarra established a
command economy by expelling Cubarsquos small
business and land owners Many of those who lost
their business and freedom now live in Miami
ECOMICS UNIT
ECOMICS UNIT
ECOMICS UNIT
bull Because the government has total control
over production and its factors these
economies can change rapidly Whatever is
needed most will be produced
bull There is no uncertainty (people are told when
and how to work)
bull Free education health care and other public
services
bull 1) What to produce Whatever the government says to produce
bull 2) How to produce However the government tells you to produce
bull 3) For whom to produce For whomever the government tells you to produce (ideally the entire society)
ECOMICS UNIT
ECOMICS UNIT
bull Economy designed to meet needs not wants
bull No incentive to work hardhellippeople donrsquot often lose their jobs so they do the bare minimum to get by
bull Large bureaucracy means slow decision making raises cost of production lacks flexibility
bull No reward for initiative slows progress
Another disadvantage to the command economy
is that there is no incentive for
entrepreneurship when you canrsquot run your own
business
Why would people stand in line all day for one roll
of toilet paper
Moscow 1988
Command Economies
ECOMICS UNIT
Karl Marx provided the ideological foundation for this
system - most commonly known as communism
Stressed an economy controlled by the
government
You will buy
Govrsquot Inc Pizza
and you will like
it But itrsquos always
burnt I hate
their pizza
Government Inc Pizza
In a command economy consumers have very little
or no choice in what they can purchasehellip
Or even their occupation
I really enjoy workin on
the good ol farm
Not anymore you wont We need to
industrialize quickly You must move to
the city and work in the steel factory
ECOMICS UNIT
bull Basic economic questions answered by consumers
bull An economic system in which individuals own and
operate the factors of production
Adam Smith claimed that people who
trade with each other donrsquot go to war with
each other
ECOMICS UNIT
Market economies are based on the open
and free trade of goods
ECOMICS UNIT
bull USA Canada UK France etc etc
ECOMICS UNIT
bull Adjusts to change based on consumer wants
bull High degree of individual freedom
bull Low levels of government interference
bull Because individuals (with money) make the
decisions everyone (with money) has a voice in the
way the economy runs
bull Wide variety of available goods amp services
bull Many choices=high degree of consumer satisfaction
ECOMICS UNIT
bull Poverty only those with money can participate
bull Market does not provide for peoplersquos basic needs
Governments must attempt to do this (think
Katrina the tornado in Bridgeport etc)
bull High degree of uncertainty - people lose jobs
businesses fail
bull System at times puts profit before people
ECOMICS UNIT
In a pure market economy there is no government
involvement in economic decisions The government
lets the market answer the following three basic
economic questions
1 What Consumers decide what should
be produced in a market economy
through the purchases they make
ECOMICS UNIT
2 How Production is left entirely up to businesses
Businesses must be competitive in such an economy
and produce quality products at lower prices than
their competitors
3 For whom In a market economy the people who
have more money are able to buy more goods and
services
ECOMICS UNIT
ECOMICS UNIT
ldquoItrsquos Your money not the
governmentrsquosrdquo- President Ronald
Reagan
MARKETS
amp PRICES
FREEDOM OF
ENTERPRISE
amp CHOICE
PRIVATE
PROPERTY
ACTIVE BUT
LIMITED
GOVERNMENT
ROLE OF
SELF-INTEREST COMPETITION
ECOMICS UNIT
bull Are they truly Free Market Economies
bull Does the government regulate businesses
bull Does the government control any businesses
ECOMICS UNIT
Mixed economies combine both the private interests with the governmentrsquos interests Therersquos a balance to it bull Individuals and businesses make decisions for the
private sector
bull Government makes some decisions for the public
sector (ex regulation of monopolies)rlm
bull Governments role is greater than in a free-market
economy but less than in a command economy
bull Most economies in the world today are mixed
economies
Questional Peperoni Pizza Questional Cheese Pizza
In a Mixed Economy the government regulates
what goes into the goods we purchase in order
to protect us
And you can buy your pizza wherever you want
tohellip
bull Traditional economies only make up a small part of
a countryrsquos economy
bull There are NO PURE Market economies in the world
bull There are NO PURE Command economies in the
world
ECOMICS UNIT
All economies in the world have aspects
of both command and market
ECOMICS UNIT
All modern economies in the world are MIXED economies
But the mix is different in every nation
ECOMICS UNIT
ECOMICS UNIT
The primary goal of an economic system
is to provide people with a minimum
standard of living or quality of life
Types of Economic Systems
BusinessesBusinessesBusinesses
Most needy or most money
Scarcity Limited
Resources
Unlimited
Wants Choices
WHAT GS
to produce
WHO will receive
the GS produced
[Eskimopygmy]
Answers to the above determine
ECONOMIC SYSTEMS
BASIC
ECONOMIC
PROBLEMS
TRADITIONAL FREE MARKET COMMAND
HOW will the
GS be produced
ECOMICS UNIT
bull Basic economic questions answered by Ritual
Habit and Custom
bull Life in these economies tends to be stable
predictable and continuous
ECOMICS UNIT
bull Individual roles and choices are defined by the
customs of elders and ancestors
bull These economies are usually based in societies of
huntergatherers
bull Sharing is a big part of these economies
ECOMICS UNIT
bull Australian Aborigines
ECOMICS UNIT
ECOMICS UNIT
bull 1) What to produce Whatever ritual habit or
custom dictates
bull 2) How to produce However ritual habit or
custom dictate
bull 3) For whom to produce For whomever ritual
habit or custom dictate
ECOMICS UNIT
bull There is little or no uncertaintyhellipeveryone
knows what role to play
bull Life is generally stable predictable and
continuous
ECOMICS UNIT
ECOMICS UNIT
bull Tend to discourage new ideas and new ways
of doing things
bull Lack of progress lowers standard of living
bull Technology is not used difficult to improve
httpwwwyoutubecomwatchv=_iSHqUmzfKM How to build a yurt
ECOMICS UNIT
ECOMICS UNIT
Command Economy- Typically
begin with revolutions
ECOMICS UNIT
bull The government controls all aspects of the economy
bull Private property is illegal
bull Supply and demand are determined by the government not by consumers and producers
bull Everyone is paid equally no matter what job they do
bull Industry and businesses are owned and controlled by the government not private individuals
ECOMICS UNIT
In Cuba all residents are given rations of foods
Instead of purchasing food in a market Cubans go to
government food supply centers
ECOMICS UNIT
Cubarsquos Fidel Castro and Che Guevarra established a
command economy by expelling Cubarsquos small
business and land owners Many of those who lost
their business and freedom now live in Miami
ECOMICS UNIT
ECOMICS UNIT
ECOMICS UNIT
bull Because the government has total control
over production and its factors these
economies can change rapidly Whatever is
needed most will be produced
bull There is no uncertainty (people are told when
and how to work)
bull Free education health care and other public
services
bull 1) What to produce Whatever the government says to produce
bull 2) How to produce However the government tells you to produce
bull 3) For whom to produce For whomever the government tells you to produce (ideally the entire society)
ECOMICS UNIT
ECOMICS UNIT
bull Economy designed to meet needs not wants
bull No incentive to work hardhellippeople donrsquot often lose their jobs so they do the bare minimum to get by
bull Large bureaucracy means slow decision making raises cost of production lacks flexibility
bull No reward for initiative slows progress
Another disadvantage to the command economy
is that there is no incentive for
entrepreneurship when you canrsquot run your own
business
Why would people stand in line all day for one roll
of toilet paper
Moscow 1988
Command Economies
ECOMICS UNIT
Karl Marx provided the ideological foundation for this
system - most commonly known as communism
Stressed an economy controlled by the
government
You will buy
Govrsquot Inc Pizza
and you will like
it But itrsquos always
burnt I hate
their pizza
Government Inc Pizza
In a command economy consumers have very little
or no choice in what they can purchasehellip
Or even their occupation
I really enjoy workin on
the good ol farm
Not anymore you wont We need to
industrialize quickly You must move to
the city and work in the steel factory
ECOMICS UNIT
bull Basic economic questions answered by consumers
bull An economic system in which individuals own and
operate the factors of production
Adam Smith claimed that people who
trade with each other donrsquot go to war with
each other
ECOMICS UNIT
Market economies are based on the open
and free trade of goods
ECOMICS UNIT
bull USA Canada UK France etc etc
ECOMICS UNIT
bull Adjusts to change based on consumer wants
bull High degree of individual freedom
bull Low levels of government interference
bull Because individuals (with money) make the
decisions everyone (with money) has a voice in the
way the economy runs
bull Wide variety of available goods amp services
bull Many choices=high degree of consumer satisfaction
ECOMICS UNIT
bull Poverty only those with money can participate
bull Market does not provide for peoplersquos basic needs
Governments must attempt to do this (think
Katrina the tornado in Bridgeport etc)
bull High degree of uncertainty - people lose jobs
businesses fail
bull System at times puts profit before people
ECOMICS UNIT
In a pure market economy there is no government
involvement in economic decisions The government
lets the market answer the following three basic
economic questions
1 What Consumers decide what should
be produced in a market economy
through the purchases they make
ECOMICS UNIT
2 How Production is left entirely up to businesses
Businesses must be competitive in such an economy
and produce quality products at lower prices than
their competitors
3 For whom In a market economy the people who
have more money are able to buy more goods and
services
ECOMICS UNIT
ECOMICS UNIT
ldquoItrsquos Your money not the
governmentrsquosrdquo- President Ronald
Reagan
MARKETS
amp PRICES
FREEDOM OF
ENTERPRISE
amp CHOICE
PRIVATE
PROPERTY
ACTIVE BUT
LIMITED
GOVERNMENT
ROLE OF
SELF-INTEREST COMPETITION
ECOMICS UNIT
bull Are they truly Free Market Economies
bull Does the government regulate businesses
bull Does the government control any businesses
ECOMICS UNIT
Mixed economies combine both the private interests with the governmentrsquos interests Therersquos a balance to it bull Individuals and businesses make decisions for the
private sector
bull Government makes some decisions for the public
sector (ex regulation of monopolies)rlm
bull Governments role is greater than in a free-market
economy but less than in a command economy
bull Most economies in the world today are mixed
economies
Questional Peperoni Pizza Questional Cheese Pizza
In a Mixed Economy the government regulates
what goes into the goods we purchase in order
to protect us
And you can buy your pizza wherever you want
tohellip
bull Traditional economies only make up a small part of
a countryrsquos economy
bull There are NO PURE Market economies in the world
bull There are NO PURE Command economies in the
world
ECOMICS UNIT
All economies in the world have aspects
of both command and market
ECOMICS UNIT
All modern economies in the world are MIXED economies
But the mix is different in every nation
ECOMICS UNIT
BusinessesBusinessesBusinesses
Most needy or most money
Scarcity Limited
Resources
Unlimited
Wants Choices
WHAT GS
to produce
WHO will receive
the GS produced
[Eskimopygmy]
Answers to the above determine
ECONOMIC SYSTEMS
BASIC
ECONOMIC
PROBLEMS
TRADITIONAL FREE MARKET COMMAND
HOW will the
GS be produced
ECOMICS UNIT
bull Basic economic questions answered by Ritual
Habit and Custom
bull Life in these economies tends to be stable
predictable and continuous
ECOMICS UNIT
bull Individual roles and choices are defined by the
customs of elders and ancestors
bull These economies are usually based in societies of
huntergatherers
bull Sharing is a big part of these economies
ECOMICS UNIT
bull Australian Aborigines
ECOMICS UNIT
ECOMICS UNIT
bull 1) What to produce Whatever ritual habit or
custom dictates
bull 2) How to produce However ritual habit or
custom dictate
bull 3) For whom to produce For whomever ritual
habit or custom dictate
ECOMICS UNIT
bull There is little or no uncertaintyhellipeveryone
knows what role to play
bull Life is generally stable predictable and
continuous
ECOMICS UNIT
ECOMICS UNIT
bull Tend to discourage new ideas and new ways
of doing things
bull Lack of progress lowers standard of living
bull Technology is not used difficult to improve
httpwwwyoutubecomwatchv=_iSHqUmzfKM How to build a yurt
ECOMICS UNIT
ECOMICS UNIT
Command Economy- Typically
begin with revolutions
ECOMICS UNIT
bull The government controls all aspects of the economy
bull Private property is illegal
bull Supply and demand are determined by the government not by consumers and producers
bull Everyone is paid equally no matter what job they do
bull Industry and businesses are owned and controlled by the government not private individuals
ECOMICS UNIT
In Cuba all residents are given rations of foods
Instead of purchasing food in a market Cubans go to
government food supply centers
ECOMICS UNIT
Cubarsquos Fidel Castro and Che Guevarra established a
command economy by expelling Cubarsquos small
business and land owners Many of those who lost
their business and freedom now live in Miami
ECOMICS UNIT
ECOMICS UNIT
ECOMICS UNIT
bull Because the government has total control
over production and its factors these
economies can change rapidly Whatever is
needed most will be produced
bull There is no uncertainty (people are told when
and how to work)
bull Free education health care and other public
services
bull 1) What to produce Whatever the government says to produce
bull 2) How to produce However the government tells you to produce
bull 3) For whom to produce For whomever the government tells you to produce (ideally the entire society)
ECOMICS UNIT
ECOMICS UNIT
bull Economy designed to meet needs not wants
bull No incentive to work hardhellippeople donrsquot often lose their jobs so they do the bare minimum to get by
bull Large bureaucracy means slow decision making raises cost of production lacks flexibility
bull No reward for initiative slows progress
Another disadvantage to the command economy
is that there is no incentive for
entrepreneurship when you canrsquot run your own
business
Why would people stand in line all day for one roll
of toilet paper
Moscow 1988
Command Economies
ECOMICS UNIT
Karl Marx provided the ideological foundation for this
system - most commonly known as communism
Stressed an economy controlled by the
government
You will buy
Govrsquot Inc Pizza
and you will like
it But itrsquos always
burnt I hate
their pizza
Government Inc Pizza
In a command economy consumers have very little
or no choice in what they can purchasehellip
Or even their occupation
I really enjoy workin on
the good ol farm
Not anymore you wont We need to
industrialize quickly You must move to
the city and work in the steel factory
ECOMICS UNIT
bull Basic economic questions answered by consumers
bull An economic system in which individuals own and
operate the factors of production
Adam Smith claimed that people who
trade with each other donrsquot go to war with
each other
ECOMICS UNIT
Market economies are based on the open
and free trade of goods
ECOMICS UNIT
bull USA Canada UK France etc etc
ECOMICS UNIT
bull Adjusts to change based on consumer wants
bull High degree of individual freedom
bull Low levels of government interference
bull Because individuals (with money) make the
decisions everyone (with money) has a voice in the
way the economy runs
bull Wide variety of available goods amp services
bull Many choices=high degree of consumer satisfaction
ECOMICS UNIT
bull Poverty only those with money can participate
bull Market does not provide for peoplersquos basic needs
Governments must attempt to do this (think
Katrina the tornado in Bridgeport etc)
bull High degree of uncertainty - people lose jobs
businesses fail
bull System at times puts profit before people
ECOMICS UNIT
In a pure market economy there is no government
involvement in economic decisions The government
lets the market answer the following three basic
economic questions
1 What Consumers decide what should
be produced in a market economy
through the purchases they make
ECOMICS UNIT
2 How Production is left entirely up to businesses
Businesses must be competitive in such an economy
and produce quality products at lower prices than
their competitors
3 For whom In a market economy the people who
have more money are able to buy more goods and
services
ECOMICS UNIT
ECOMICS UNIT
ldquoItrsquos Your money not the
governmentrsquosrdquo- President Ronald
Reagan
MARKETS
amp PRICES
FREEDOM OF
ENTERPRISE
amp CHOICE
PRIVATE
PROPERTY
ACTIVE BUT
LIMITED
GOVERNMENT
ROLE OF
SELF-INTEREST COMPETITION
ECOMICS UNIT
bull Are they truly Free Market Economies
bull Does the government regulate businesses
bull Does the government control any businesses
ECOMICS UNIT
Mixed economies combine both the private interests with the governmentrsquos interests Therersquos a balance to it bull Individuals and businesses make decisions for the
private sector
bull Government makes some decisions for the public
sector (ex regulation of monopolies)rlm
bull Governments role is greater than in a free-market
economy but less than in a command economy
bull Most economies in the world today are mixed
economies
Questional Peperoni Pizza Questional Cheese Pizza
In a Mixed Economy the government regulates
what goes into the goods we purchase in order
to protect us
And you can buy your pizza wherever you want
tohellip
bull Traditional economies only make up a small part of
a countryrsquos economy
bull There are NO PURE Market economies in the world
bull There are NO PURE Command economies in the
world
ECOMICS UNIT
All economies in the world have aspects
of both command and market
ECOMICS UNIT
All modern economies in the world are MIXED economies
But the mix is different in every nation
ECOMICS UNIT
ECOMICS UNIT
bull Basic economic questions answered by Ritual
Habit and Custom
bull Life in these economies tends to be stable
predictable and continuous
ECOMICS UNIT
bull Individual roles and choices are defined by the
customs of elders and ancestors
bull These economies are usually based in societies of
huntergatherers
bull Sharing is a big part of these economies
ECOMICS UNIT
bull Australian Aborigines
ECOMICS UNIT
ECOMICS UNIT
bull 1) What to produce Whatever ritual habit or
custom dictates
bull 2) How to produce However ritual habit or
custom dictate
bull 3) For whom to produce For whomever ritual
habit or custom dictate
ECOMICS UNIT
bull There is little or no uncertaintyhellipeveryone
knows what role to play
bull Life is generally stable predictable and
continuous
ECOMICS UNIT
ECOMICS UNIT
bull Tend to discourage new ideas and new ways
of doing things
bull Lack of progress lowers standard of living
bull Technology is not used difficult to improve
httpwwwyoutubecomwatchv=_iSHqUmzfKM How to build a yurt
ECOMICS UNIT
ECOMICS UNIT
Command Economy- Typically
begin with revolutions
ECOMICS UNIT
bull The government controls all aspects of the economy
bull Private property is illegal
bull Supply and demand are determined by the government not by consumers and producers
bull Everyone is paid equally no matter what job they do
bull Industry and businesses are owned and controlled by the government not private individuals
ECOMICS UNIT
In Cuba all residents are given rations of foods
Instead of purchasing food in a market Cubans go to
government food supply centers
ECOMICS UNIT
Cubarsquos Fidel Castro and Che Guevarra established a
command economy by expelling Cubarsquos small
business and land owners Many of those who lost
their business and freedom now live in Miami
ECOMICS UNIT
ECOMICS UNIT
ECOMICS UNIT
bull Because the government has total control
over production and its factors these
economies can change rapidly Whatever is
needed most will be produced
bull There is no uncertainty (people are told when
and how to work)
bull Free education health care and other public
services
bull 1) What to produce Whatever the government says to produce
bull 2) How to produce However the government tells you to produce
bull 3) For whom to produce For whomever the government tells you to produce (ideally the entire society)
ECOMICS UNIT
ECOMICS UNIT
bull Economy designed to meet needs not wants
bull No incentive to work hardhellippeople donrsquot often lose their jobs so they do the bare minimum to get by
bull Large bureaucracy means slow decision making raises cost of production lacks flexibility
bull No reward for initiative slows progress
Another disadvantage to the command economy
is that there is no incentive for
entrepreneurship when you canrsquot run your own
business
Why would people stand in line all day for one roll
of toilet paper
Moscow 1988
Command Economies
ECOMICS UNIT
Karl Marx provided the ideological foundation for this
system - most commonly known as communism
Stressed an economy controlled by the
government
You will buy
Govrsquot Inc Pizza
and you will like
it But itrsquos always
burnt I hate
their pizza
Government Inc Pizza
In a command economy consumers have very little
or no choice in what they can purchasehellip
Or even their occupation
I really enjoy workin on
the good ol farm
Not anymore you wont We need to
industrialize quickly You must move to
the city and work in the steel factory
ECOMICS UNIT
bull Basic economic questions answered by consumers
bull An economic system in which individuals own and
operate the factors of production
Adam Smith claimed that people who
trade with each other donrsquot go to war with
each other
ECOMICS UNIT
Market economies are based on the open
and free trade of goods
ECOMICS UNIT
bull USA Canada UK France etc etc
ECOMICS UNIT
bull Adjusts to change based on consumer wants
bull High degree of individual freedom
bull Low levels of government interference
bull Because individuals (with money) make the
decisions everyone (with money) has a voice in the
way the economy runs
bull Wide variety of available goods amp services
bull Many choices=high degree of consumer satisfaction
ECOMICS UNIT
bull Poverty only those with money can participate
bull Market does not provide for peoplersquos basic needs
Governments must attempt to do this (think
Katrina the tornado in Bridgeport etc)
bull High degree of uncertainty - people lose jobs
businesses fail
bull System at times puts profit before people
ECOMICS UNIT
In a pure market economy there is no government
involvement in economic decisions The government
lets the market answer the following three basic
economic questions
1 What Consumers decide what should
be produced in a market economy
through the purchases they make
ECOMICS UNIT
2 How Production is left entirely up to businesses
Businesses must be competitive in such an economy
and produce quality products at lower prices than
their competitors
3 For whom In a market economy the people who
have more money are able to buy more goods and
services
ECOMICS UNIT
ECOMICS UNIT
ldquoItrsquos Your money not the
governmentrsquosrdquo- President Ronald
Reagan
MARKETS
amp PRICES
FREEDOM OF
ENTERPRISE
amp CHOICE
PRIVATE
PROPERTY
ACTIVE BUT
LIMITED
GOVERNMENT
ROLE OF
SELF-INTEREST COMPETITION
ECOMICS UNIT
bull Are they truly Free Market Economies
bull Does the government regulate businesses
bull Does the government control any businesses
ECOMICS UNIT
Mixed economies combine both the private interests with the governmentrsquos interests Therersquos a balance to it bull Individuals and businesses make decisions for the
private sector
bull Government makes some decisions for the public
sector (ex regulation of monopolies)rlm
bull Governments role is greater than in a free-market
economy but less than in a command economy
bull Most economies in the world today are mixed
economies
Questional Peperoni Pizza Questional Cheese Pizza
In a Mixed Economy the government regulates
what goes into the goods we purchase in order
to protect us
And you can buy your pizza wherever you want
tohellip
bull Traditional economies only make up a small part of
a countryrsquos economy
bull There are NO PURE Market economies in the world
bull There are NO PURE Command economies in the
world
ECOMICS UNIT
All economies in the world have aspects
of both command and market
ECOMICS UNIT
All modern economies in the world are MIXED economies
But the mix is different in every nation
ECOMICS UNIT
ECOMICS UNIT
bull Individual roles and choices are defined by the
customs of elders and ancestors
bull These economies are usually based in societies of
huntergatherers
bull Sharing is a big part of these economies
ECOMICS UNIT
bull Australian Aborigines
ECOMICS UNIT
ECOMICS UNIT
bull 1) What to produce Whatever ritual habit or
custom dictates
bull 2) How to produce However ritual habit or
custom dictate
bull 3) For whom to produce For whomever ritual
habit or custom dictate
ECOMICS UNIT
bull There is little or no uncertaintyhellipeveryone
knows what role to play
bull Life is generally stable predictable and
continuous
ECOMICS UNIT
ECOMICS UNIT
bull Tend to discourage new ideas and new ways
of doing things
bull Lack of progress lowers standard of living
bull Technology is not used difficult to improve
httpwwwyoutubecomwatchv=_iSHqUmzfKM How to build a yurt
ECOMICS UNIT
ECOMICS UNIT
Command Economy- Typically
begin with revolutions
ECOMICS UNIT
bull The government controls all aspects of the economy
bull Private property is illegal
bull Supply and demand are determined by the government not by consumers and producers
bull Everyone is paid equally no matter what job they do
bull Industry and businesses are owned and controlled by the government not private individuals
ECOMICS UNIT
In Cuba all residents are given rations of foods
Instead of purchasing food in a market Cubans go to
government food supply centers
ECOMICS UNIT
Cubarsquos Fidel Castro and Che Guevarra established a
command economy by expelling Cubarsquos small
business and land owners Many of those who lost
their business and freedom now live in Miami
ECOMICS UNIT
ECOMICS UNIT
ECOMICS UNIT
bull Because the government has total control
over production and its factors these
economies can change rapidly Whatever is
needed most will be produced
bull There is no uncertainty (people are told when
and how to work)
bull Free education health care and other public
services
bull 1) What to produce Whatever the government says to produce
bull 2) How to produce However the government tells you to produce
bull 3) For whom to produce For whomever the government tells you to produce (ideally the entire society)
ECOMICS UNIT
ECOMICS UNIT
bull Economy designed to meet needs not wants
bull No incentive to work hardhellippeople donrsquot often lose their jobs so they do the bare minimum to get by
bull Large bureaucracy means slow decision making raises cost of production lacks flexibility
bull No reward for initiative slows progress
Another disadvantage to the command economy
is that there is no incentive for
entrepreneurship when you canrsquot run your own
business
Why would people stand in line all day for one roll
of toilet paper
Moscow 1988
Command Economies
ECOMICS UNIT
Karl Marx provided the ideological foundation for this
system - most commonly known as communism
Stressed an economy controlled by the
government
You will buy
Govrsquot Inc Pizza
and you will like
it But itrsquos always
burnt I hate
their pizza
Government Inc Pizza
In a command economy consumers have very little
or no choice in what they can purchasehellip
Or even their occupation
I really enjoy workin on
the good ol farm
Not anymore you wont We need to
industrialize quickly You must move to
the city and work in the steel factory
ECOMICS UNIT
bull Basic economic questions answered by consumers
bull An economic system in which individuals own and
operate the factors of production
Adam Smith claimed that people who
trade with each other donrsquot go to war with
each other
ECOMICS UNIT
Market economies are based on the open
and free trade of goods
ECOMICS UNIT
bull USA Canada UK France etc etc
ECOMICS UNIT
bull Adjusts to change based on consumer wants
bull High degree of individual freedom
bull Low levels of government interference
bull Because individuals (with money) make the
decisions everyone (with money) has a voice in the
way the economy runs
bull Wide variety of available goods amp services
bull Many choices=high degree of consumer satisfaction
ECOMICS UNIT
bull Poverty only those with money can participate
bull Market does not provide for peoplersquos basic needs
Governments must attempt to do this (think
Katrina the tornado in Bridgeport etc)
bull High degree of uncertainty - people lose jobs
businesses fail
bull System at times puts profit before people
ECOMICS UNIT
In a pure market economy there is no government
involvement in economic decisions The government
lets the market answer the following three basic
economic questions
1 What Consumers decide what should
be produced in a market economy
through the purchases they make
ECOMICS UNIT
2 How Production is left entirely up to businesses
Businesses must be competitive in such an economy
and produce quality products at lower prices than
their competitors
3 For whom In a market economy the people who
have more money are able to buy more goods and
services
ECOMICS UNIT
ECOMICS UNIT
ldquoItrsquos Your money not the
governmentrsquosrdquo- President Ronald
Reagan
MARKETS
amp PRICES
FREEDOM OF
ENTERPRISE
amp CHOICE
PRIVATE
PROPERTY
ACTIVE BUT
LIMITED
GOVERNMENT
ROLE OF
SELF-INTEREST COMPETITION
ECOMICS UNIT
bull Are they truly Free Market Economies
bull Does the government regulate businesses
bull Does the government control any businesses
ECOMICS UNIT
Mixed economies combine both the private interests with the governmentrsquos interests Therersquos a balance to it bull Individuals and businesses make decisions for the
private sector
bull Government makes some decisions for the public
sector (ex regulation of monopolies)rlm
bull Governments role is greater than in a free-market
economy but less than in a command economy
bull Most economies in the world today are mixed
economies
Questional Peperoni Pizza Questional Cheese Pizza
In a Mixed Economy the government regulates
what goes into the goods we purchase in order
to protect us
And you can buy your pizza wherever you want
tohellip
bull Traditional economies only make up a small part of
a countryrsquos economy
bull There are NO PURE Market economies in the world
bull There are NO PURE Command economies in the
world
ECOMICS UNIT
All economies in the world have aspects
of both command and market
ECOMICS UNIT
All modern economies in the world are MIXED economies
But the mix is different in every nation
ECOMICS UNIT
ECOMICS UNIT
bull Australian Aborigines
ECOMICS UNIT
ECOMICS UNIT
bull 1) What to produce Whatever ritual habit or
custom dictates
bull 2) How to produce However ritual habit or
custom dictate
bull 3) For whom to produce For whomever ritual
habit or custom dictate
ECOMICS UNIT
bull There is little or no uncertaintyhellipeveryone
knows what role to play
bull Life is generally stable predictable and
continuous
ECOMICS UNIT
ECOMICS UNIT
bull Tend to discourage new ideas and new ways
of doing things
bull Lack of progress lowers standard of living
bull Technology is not used difficult to improve
httpwwwyoutubecomwatchv=_iSHqUmzfKM How to build a yurt
ECOMICS UNIT
ECOMICS UNIT
Command Economy- Typically
begin with revolutions
ECOMICS UNIT
bull The government controls all aspects of the economy
bull Private property is illegal
bull Supply and demand are determined by the government not by consumers and producers
bull Everyone is paid equally no matter what job they do
bull Industry and businesses are owned and controlled by the government not private individuals
ECOMICS UNIT
In Cuba all residents are given rations of foods
Instead of purchasing food in a market Cubans go to
government food supply centers
ECOMICS UNIT
Cubarsquos Fidel Castro and Che Guevarra established a
command economy by expelling Cubarsquos small
business and land owners Many of those who lost
their business and freedom now live in Miami
ECOMICS UNIT
ECOMICS UNIT
ECOMICS UNIT
bull Because the government has total control
over production and its factors these
economies can change rapidly Whatever is
needed most will be produced
bull There is no uncertainty (people are told when
and how to work)
bull Free education health care and other public
services
bull 1) What to produce Whatever the government says to produce
bull 2) How to produce However the government tells you to produce
bull 3) For whom to produce For whomever the government tells you to produce (ideally the entire society)
ECOMICS UNIT
ECOMICS UNIT
bull Economy designed to meet needs not wants
bull No incentive to work hardhellippeople donrsquot often lose their jobs so they do the bare minimum to get by
bull Large bureaucracy means slow decision making raises cost of production lacks flexibility
bull No reward for initiative slows progress
Another disadvantage to the command economy
is that there is no incentive for
entrepreneurship when you canrsquot run your own
business
Why would people stand in line all day for one roll
of toilet paper
Moscow 1988
Command Economies
ECOMICS UNIT
Karl Marx provided the ideological foundation for this
system - most commonly known as communism
Stressed an economy controlled by the
government
You will buy
Govrsquot Inc Pizza
and you will like
it But itrsquos always
burnt I hate
their pizza
Government Inc Pizza
In a command economy consumers have very little
or no choice in what they can purchasehellip
Or even their occupation
I really enjoy workin on
the good ol farm
Not anymore you wont We need to
industrialize quickly You must move to
the city and work in the steel factory
ECOMICS UNIT
bull Basic economic questions answered by consumers
bull An economic system in which individuals own and
operate the factors of production
Adam Smith claimed that people who
trade with each other donrsquot go to war with
each other
ECOMICS UNIT
Market economies are based on the open
and free trade of goods
ECOMICS UNIT
bull USA Canada UK France etc etc
ECOMICS UNIT
bull Adjusts to change based on consumer wants
bull High degree of individual freedom
bull Low levels of government interference
bull Because individuals (with money) make the
decisions everyone (with money) has a voice in the
way the economy runs
bull Wide variety of available goods amp services
bull Many choices=high degree of consumer satisfaction
ECOMICS UNIT
bull Poverty only those with money can participate
bull Market does not provide for peoplersquos basic needs
Governments must attempt to do this (think
Katrina the tornado in Bridgeport etc)
bull High degree of uncertainty - people lose jobs
businesses fail
bull System at times puts profit before people
ECOMICS UNIT
In a pure market economy there is no government
involvement in economic decisions The government
lets the market answer the following three basic
economic questions
1 What Consumers decide what should
be produced in a market economy
through the purchases they make
ECOMICS UNIT
2 How Production is left entirely up to businesses
Businesses must be competitive in such an economy
and produce quality products at lower prices than
their competitors
3 For whom In a market economy the people who
have more money are able to buy more goods and
services
ECOMICS UNIT
ECOMICS UNIT
ldquoItrsquos Your money not the
governmentrsquosrdquo- President Ronald
Reagan
MARKETS
amp PRICES
FREEDOM OF
ENTERPRISE
amp CHOICE
PRIVATE
PROPERTY
ACTIVE BUT
LIMITED
GOVERNMENT
ROLE OF
SELF-INTEREST COMPETITION
ECOMICS UNIT
bull Are they truly Free Market Economies
bull Does the government regulate businesses
bull Does the government control any businesses
ECOMICS UNIT
Mixed economies combine both the private interests with the governmentrsquos interests Therersquos a balance to it bull Individuals and businesses make decisions for the
private sector
bull Government makes some decisions for the public
sector (ex regulation of monopolies)rlm
bull Governments role is greater than in a free-market
economy but less than in a command economy
bull Most economies in the world today are mixed
economies
Questional Peperoni Pizza Questional Cheese Pizza
In a Mixed Economy the government regulates
what goes into the goods we purchase in order
to protect us
And you can buy your pizza wherever you want
tohellip
bull Traditional economies only make up a small part of
a countryrsquos economy
bull There are NO PURE Market economies in the world
bull There are NO PURE Command economies in the
world
ECOMICS UNIT
All economies in the world have aspects
of both command and market
ECOMICS UNIT
All modern economies in the world are MIXED economies
But the mix is different in every nation
ECOMICS UNIT
ECOMICS UNIT
ECOMICS UNIT
bull 1) What to produce Whatever ritual habit or
custom dictates
bull 2) How to produce However ritual habit or
custom dictate
bull 3) For whom to produce For whomever ritual
habit or custom dictate
ECOMICS UNIT
bull There is little or no uncertaintyhellipeveryone
knows what role to play
bull Life is generally stable predictable and
continuous
ECOMICS UNIT
ECOMICS UNIT
bull Tend to discourage new ideas and new ways
of doing things
bull Lack of progress lowers standard of living
bull Technology is not used difficult to improve
httpwwwyoutubecomwatchv=_iSHqUmzfKM How to build a yurt
ECOMICS UNIT
ECOMICS UNIT
Command Economy- Typically
begin with revolutions
ECOMICS UNIT
bull The government controls all aspects of the economy
bull Private property is illegal
bull Supply and demand are determined by the government not by consumers and producers
bull Everyone is paid equally no matter what job they do
bull Industry and businesses are owned and controlled by the government not private individuals
ECOMICS UNIT
In Cuba all residents are given rations of foods
Instead of purchasing food in a market Cubans go to
government food supply centers
ECOMICS UNIT
Cubarsquos Fidel Castro and Che Guevarra established a
command economy by expelling Cubarsquos small
business and land owners Many of those who lost
their business and freedom now live in Miami
ECOMICS UNIT
ECOMICS UNIT
ECOMICS UNIT
bull Because the government has total control
over production and its factors these
economies can change rapidly Whatever is
needed most will be produced
bull There is no uncertainty (people are told when
and how to work)
bull Free education health care and other public
services
bull 1) What to produce Whatever the government says to produce
bull 2) How to produce However the government tells you to produce
bull 3) For whom to produce For whomever the government tells you to produce (ideally the entire society)
ECOMICS UNIT
ECOMICS UNIT
bull Economy designed to meet needs not wants
bull No incentive to work hardhellippeople donrsquot often lose their jobs so they do the bare minimum to get by
bull Large bureaucracy means slow decision making raises cost of production lacks flexibility
bull No reward for initiative slows progress
Another disadvantage to the command economy
is that there is no incentive for
entrepreneurship when you canrsquot run your own
business
Why would people stand in line all day for one roll
of toilet paper
Moscow 1988
Command Economies
ECOMICS UNIT
Karl Marx provided the ideological foundation for this
system - most commonly known as communism
Stressed an economy controlled by the
government
You will buy
Govrsquot Inc Pizza
and you will like
it But itrsquos always
burnt I hate
their pizza
Government Inc Pizza
In a command economy consumers have very little
or no choice in what they can purchasehellip
Or even their occupation
I really enjoy workin on
the good ol farm
Not anymore you wont We need to
industrialize quickly You must move to
the city and work in the steel factory
ECOMICS UNIT
bull Basic economic questions answered by consumers
bull An economic system in which individuals own and
operate the factors of production
Adam Smith claimed that people who
trade with each other donrsquot go to war with
each other
ECOMICS UNIT
Market economies are based on the open
and free trade of goods
ECOMICS UNIT
bull USA Canada UK France etc etc
ECOMICS UNIT
bull Adjusts to change based on consumer wants
bull High degree of individual freedom
bull Low levels of government interference
bull Because individuals (with money) make the
decisions everyone (with money) has a voice in the
way the economy runs
bull Wide variety of available goods amp services
bull Many choices=high degree of consumer satisfaction
ECOMICS UNIT
bull Poverty only those with money can participate
bull Market does not provide for peoplersquos basic needs
Governments must attempt to do this (think
Katrina the tornado in Bridgeport etc)
bull High degree of uncertainty - people lose jobs
businesses fail
bull System at times puts profit before people
ECOMICS UNIT
In a pure market economy there is no government
involvement in economic decisions The government
lets the market answer the following three basic
economic questions
1 What Consumers decide what should
be produced in a market economy
through the purchases they make
ECOMICS UNIT
2 How Production is left entirely up to businesses
Businesses must be competitive in such an economy
and produce quality products at lower prices than
their competitors
3 For whom In a market economy the people who
have more money are able to buy more goods and
services
ECOMICS UNIT
ECOMICS UNIT
ldquoItrsquos Your money not the
governmentrsquosrdquo- President Ronald
Reagan
MARKETS
amp PRICES
FREEDOM OF
ENTERPRISE
amp CHOICE
PRIVATE
PROPERTY
ACTIVE BUT
LIMITED
GOVERNMENT
ROLE OF
SELF-INTEREST COMPETITION
ECOMICS UNIT
bull Are they truly Free Market Economies
bull Does the government regulate businesses
bull Does the government control any businesses
ECOMICS UNIT
Mixed economies combine both the private interests with the governmentrsquos interests Therersquos a balance to it bull Individuals and businesses make decisions for the
private sector
bull Government makes some decisions for the public
sector (ex regulation of monopolies)rlm
bull Governments role is greater than in a free-market
economy but less than in a command economy
bull Most economies in the world today are mixed
economies
Questional Peperoni Pizza Questional Cheese Pizza
In a Mixed Economy the government regulates
what goes into the goods we purchase in order
to protect us
And you can buy your pizza wherever you want
tohellip
bull Traditional economies only make up a small part of
a countryrsquos economy
bull There are NO PURE Market economies in the world
bull There are NO PURE Command economies in the
world
ECOMICS UNIT
All economies in the world have aspects
of both command and market
ECOMICS UNIT
All modern economies in the world are MIXED economies
But the mix is different in every nation
ECOMICS UNIT
ECOMICS UNIT
bull 1) What to produce Whatever ritual habit or
custom dictates
bull 2) How to produce However ritual habit or
custom dictate
bull 3) For whom to produce For whomever ritual
habit or custom dictate
ECOMICS UNIT
bull There is little or no uncertaintyhellipeveryone
knows what role to play
bull Life is generally stable predictable and
continuous
ECOMICS UNIT
ECOMICS UNIT
bull Tend to discourage new ideas and new ways
of doing things
bull Lack of progress lowers standard of living
bull Technology is not used difficult to improve
httpwwwyoutubecomwatchv=_iSHqUmzfKM How to build a yurt
ECOMICS UNIT
ECOMICS UNIT
Command Economy- Typically
begin with revolutions
ECOMICS UNIT
bull The government controls all aspects of the economy
bull Private property is illegal
bull Supply and demand are determined by the government not by consumers and producers
bull Everyone is paid equally no matter what job they do
bull Industry and businesses are owned and controlled by the government not private individuals
ECOMICS UNIT
In Cuba all residents are given rations of foods
Instead of purchasing food in a market Cubans go to
government food supply centers
ECOMICS UNIT
Cubarsquos Fidel Castro and Che Guevarra established a
command economy by expelling Cubarsquos small
business and land owners Many of those who lost
their business and freedom now live in Miami
ECOMICS UNIT
ECOMICS UNIT
ECOMICS UNIT
bull Because the government has total control
over production and its factors these
economies can change rapidly Whatever is
needed most will be produced
bull There is no uncertainty (people are told when
and how to work)
bull Free education health care and other public
services
bull 1) What to produce Whatever the government says to produce
bull 2) How to produce However the government tells you to produce
bull 3) For whom to produce For whomever the government tells you to produce (ideally the entire society)
ECOMICS UNIT
ECOMICS UNIT
bull Economy designed to meet needs not wants
bull No incentive to work hardhellippeople donrsquot often lose their jobs so they do the bare minimum to get by
bull Large bureaucracy means slow decision making raises cost of production lacks flexibility
bull No reward for initiative slows progress
Another disadvantage to the command economy
is that there is no incentive for
entrepreneurship when you canrsquot run your own
business
Why would people stand in line all day for one roll
of toilet paper
Moscow 1988
Command Economies
ECOMICS UNIT
Karl Marx provided the ideological foundation for this
system - most commonly known as communism
Stressed an economy controlled by the
government
You will buy
Govrsquot Inc Pizza
and you will like
it But itrsquos always
burnt I hate
their pizza
Government Inc Pizza
In a command economy consumers have very little
or no choice in what they can purchasehellip
Or even their occupation
I really enjoy workin on
the good ol farm
Not anymore you wont We need to
industrialize quickly You must move to
the city and work in the steel factory
ECOMICS UNIT
bull Basic economic questions answered by consumers
bull An economic system in which individuals own and
operate the factors of production
Adam Smith claimed that people who
trade with each other donrsquot go to war with
each other
ECOMICS UNIT
Market economies are based on the open
and free trade of goods
ECOMICS UNIT
bull USA Canada UK France etc etc
ECOMICS UNIT
bull Adjusts to change based on consumer wants
bull High degree of individual freedom
bull Low levels of government interference
bull Because individuals (with money) make the
decisions everyone (with money) has a voice in the
way the economy runs
bull Wide variety of available goods amp services
bull Many choices=high degree of consumer satisfaction
ECOMICS UNIT
bull Poverty only those with money can participate
bull Market does not provide for peoplersquos basic needs
Governments must attempt to do this (think
Katrina the tornado in Bridgeport etc)
bull High degree of uncertainty - people lose jobs
businesses fail
bull System at times puts profit before people
ECOMICS UNIT
In a pure market economy there is no government
involvement in economic decisions The government
lets the market answer the following three basic
economic questions
1 What Consumers decide what should
be produced in a market economy
through the purchases they make
ECOMICS UNIT
2 How Production is left entirely up to businesses
Businesses must be competitive in such an economy
and produce quality products at lower prices than
their competitors
3 For whom In a market economy the people who
have more money are able to buy more goods and
services
ECOMICS UNIT
ECOMICS UNIT
ldquoItrsquos Your money not the
governmentrsquosrdquo- President Ronald
Reagan
MARKETS
amp PRICES
FREEDOM OF
ENTERPRISE
amp CHOICE
PRIVATE
PROPERTY
ACTIVE BUT
LIMITED
GOVERNMENT
ROLE OF
SELF-INTEREST COMPETITION
ECOMICS UNIT
bull Are they truly Free Market Economies
bull Does the government regulate businesses
bull Does the government control any businesses
ECOMICS UNIT
Mixed economies combine both the private interests with the governmentrsquos interests Therersquos a balance to it bull Individuals and businesses make decisions for the
private sector
bull Government makes some decisions for the public
sector (ex regulation of monopolies)rlm
bull Governments role is greater than in a free-market
economy but less than in a command economy
bull Most economies in the world today are mixed
economies
Questional Peperoni Pizza Questional Cheese Pizza
In a Mixed Economy the government regulates
what goes into the goods we purchase in order
to protect us
And you can buy your pizza wherever you want
tohellip
bull Traditional economies only make up a small part of
a countryrsquos economy
bull There are NO PURE Market economies in the world
bull There are NO PURE Command economies in the
world
ECOMICS UNIT
All economies in the world have aspects
of both command and market
ECOMICS UNIT
All modern economies in the world are MIXED economies
But the mix is different in every nation
ECOMICS UNIT
bull 1) What to produce Whatever ritual habit or
custom dictates
bull 2) How to produce However ritual habit or
custom dictate
bull 3) For whom to produce For whomever ritual
habit or custom dictate
ECOMICS UNIT
bull There is little or no uncertaintyhellipeveryone
knows what role to play
bull Life is generally stable predictable and
continuous
ECOMICS UNIT
ECOMICS UNIT
bull Tend to discourage new ideas and new ways
of doing things
bull Lack of progress lowers standard of living
bull Technology is not used difficult to improve
httpwwwyoutubecomwatchv=_iSHqUmzfKM How to build a yurt
ECOMICS UNIT
ECOMICS UNIT
Command Economy- Typically
begin with revolutions
ECOMICS UNIT
bull The government controls all aspects of the economy
bull Private property is illegal
bull Supply and demand are determined by the government not by consumers and producers
bull Everyone is paid equally no matter what job they do
bull Industry and businesses are owned and controlled by the government not private individuals
ECOMICS UNIT
In Cuba all residents are given rations of foods
Instead of purchasing food in a market Cubans go to
government food supply centers
ECOMICS UNIT
Cubarsquos Fidel Castro and Che Guevarra established a
command economy by expelling Cubarsquos small
business and land owners Many of those who lost
their business and freedom now live in Miami
ECOMICS UNIT
ECOMICS UNIT
ECOMICS UNIT
bull Because the government has total control
over production and its factors these
economies can change rapidly Whatever is
needed most will be produced
bull There is no uncertainty (people are told when
and how to work)
bull Free education health care and other public
services
bull 1) What to produce Whatever the government says to produce
bull 2) How to produce However the government tells you to produce
bull 3) For whom to produce For whomever the government tells you to produce (ideally the entire society)
ECOMICS UNIT
ECOMICS UNIT
bull Economy designed to meet needs not wants
bull No incentive to work hardhellippeople donrsquot often lose their jobs so they do the bare minimum to get by
bull Large bureaucracy means slow decision making raises cost of production lacks flexibility
bull No reward for initiative slows progress
Another disadvantage to the command economy
is that there is no incentive for
entrepreneurship when you canrsquot run your own
business
Why would people stand in line all day for one roll
of toilet paper
Moscow 1988
Command Economies
ECOMICS UNIT
Karl Marx provided the ideological foundation for this
system - most commonly known as communism
Stressed an economy controlled by the
government
You will buy
Govrsquot Inc Pizza
and you will like
it But itrsquos always
burnt I hate
their pizza
Government Inc Pizza
In a command economy consumers have very little
or no choice in what they can purchasehellip
Or even their occupation
I really enjoy workin on
the good ol farm
Not anymore you wont We need to
industrialize quickly You must move to
the city and work in the steel factory
ECOMICS UNIT
bull Basic economic questions answered by consumers
bull An economic system in which individuals own and
operate the factors of production
Adam Smith claimed that people who
trade with each other donrsquot go to war with
each other
ECOMICS UNIT
Market economies are based on the open
and free trade of goods
ECOMICS UNIT
bull USA Canada UK France etc etc
ECOMICS UNIT
bull Adjusts to change based on consumer wants
bull High degree of individual freedom
bull Low levels of government interference
bull Because individuals (with money) make the
decisions everyone (with money) has a voice in the
way the economy runs
bull Wide variety of available goods amp services
bull Many choices=high degree of consumer satisfaction
ECOMICS UNIT
bull Poverty only those with money can participate
bull Market does not provide for peoplersquos basic needs
Governments must attempt to do this (think
Katrina the tornado in Bridgeport etc)
bull High degree of uncertainty - people lose jobs
businesses fail
bull System at times puts profit before people
ECOMICS UNIT
In a pure market economy there is no government
involvement in economic decisions The government
lets the market answer the following three basic
economic questions
1 What Consumers decide what should
be produced in a market economy
through the purchases they make
ECOMICS UNIT
2 How Production is left entirely up to businesses
Businesses must be competitive in such an economy
and produce quality products at lower prices than
their competitors
3 For whom In a market economy the people who
have more money are able to buy more goods and
services
ECOMICS UNIT
ECOMICS UNIT
ldquoItrsquos Your money not the
governmentrsquosrdquo- President Ronald
Reagan
MARKETS
amp PRICES
FREEDOM OF
ENTERPRISE
amp CHOICE
PRIVATE
PROPERTY
ACTIVE BUT
LIMITED
GOVERNMENT
ROLE OF
SELF-INTEREST COMPETITION
ECOMICS UNIT
bull Are they truly Free Market Economies
bull Does the government regulate businesses
bull Does the government control any businesses
ECOMICS UNIT
Mixed economies combine both the private interests with the governmentrsquos interests Therersquos a balance to it bull Individuals and businesses make decisions for the
private sector
bull Government makes some decisions for the public
sector (ex regulation of monopolies)rlm
bull Governments role is greater than in a free-market
economy but less than in a command economy
bull Most economies in the world today are mixed
economies
Questional Peperoni Pizza Questional Cheese Pizza
In a Mixed Economy the government regulates
what goes into the goods we purchase in order
to protect us
And you can buy your pizza wherever you want
tohellip
bull Traditional economies only make up a small part of
a countryrsquos economy
bull There are NO PURE Market economies in the world
bull There are NO PURE Command economies in the
world
ECOMICS UNIT
All economies in the world have aspects
of both command and market
ECOMICS UNIT
All modern economies in the world are MIXED economies
But the mix is different in every nation
ECOMICS UNIT
bull There is little or no uncertaintyhellipeveryone
knows what role to play
bull Life is generally stable predictable and
continuous
ECOMICS UNIT
ECOMICS UNIT
bull Tend to discourage new ideas and new ways
of doing things
bull Lack of progress lowers standard of living
bull Technology is not used difficult to improve
httpwwwyoutubecomwatchv=_iSHqUmzfKM How to build a yurt
ECOMICS UNIT
ECOMICS UNIT
Command Economy- Typically
begin with revolutions
ECOMICS UNIT
bull The government controls all aspects of the economy
bull Private property is illegal
bull Supply and demand are determined by the government not by consumers and producers
bull Everyone is paid equally no matter what job they do
bull Industry and businesses are owned and controlled by the government not private individuals
ECOMICS UNIT
In Cuba all residents are given rations of foods
Instead of purchasing food in a market Cubans go to
government food supply centers
ECOMICS UNIT
Cubarsquos Fidel Castro and Che Guevarra established a
command economy by expelling Cubarsquos small
business and land owners Many of those who lost
their business and freedom now live in Miami
ECOMICS UNIT
ECOMICS UNIT
ECOMICS UNIT
bull Because the government has total control
over production and its factors these
economies can change rapidly Whatever is
needed most will be produced
bull There is no uncertainty (people are told when
and how to work)
bull Free education health care and other public
services
bull 1) What to produce Whatever the government says to produce
bull 2) How to produce However the government tells you to produce
bull 3) For whom to produce For whomever the government tells you to produce (ideally the entire society)
ECOMICS UNIT
ECOMICS UNIT
bull Economy designed to meet needs not wants
bull No incentive to work hardhellippeople donrsquot often lose their jobs so they do the bare minimum to get by
bull Large bureaucracy means slow decision making raises cost of production lacks flexibility
bull No reward for initiative slows progress
Another disadvantage to the command economy
is that there is no incentive for
entrepreneurship when you canrsquot run your own
business
Why would people stand in line all day for one roll
of toilet paper
Moscow 1988
Command Economies
ECOMICS UNIT
Karl Marx provided the ideological foundation for this
system - most commonly known as communism
Stressed an economy controlled by the
government
You will buy
Govrsquot Inc Pizza
and you will like
it But itrsquos always
burnt I hate
their pizza
Government Inc Pizza
In a command economy consumers have very little
or no choice in what they can purchasehellip
Or even their occupation
I really enjoy workin on
the good ol farm
Not anymore you wont We need to
industrialize quickly You must move to
the city and work in the steel factory
ECOMICS UNIT
bull Basic economic questions answered by consumers
bull An economic system in which individuals own and
operate the factors of production
Adam Smith claimed that people who
trade with each other donrsquot go to war with
each other
ECOMICS UNIT
Market economies are based on the open
and free trade of goods
ECOMICS UNIT
bull USA Canada UK France etc etc
ECOMICS UNIT
bull Adjusts to change based on consumer wants
bull High degree of individual freedom
bull Low levels of government interference
bull Because individuals (with money) make the
decisions everyone (with money) has a voice in the
way the economy runs
bull Wide variety of available goods amp services
bull Many choices=high degree of consumer satisfaction
ECOMICS UNIT
bull Poverty only those with money can participate
bull Market does not provide for peoplersquos basic needs
Governments must attempt to do this (think
Katrina the tornado in Bridgeport etc)
bull High degree of uncertainty - people lose jobs
businesses fail
bull System at times puts profit before people
ECOMICS UNIT
In a pure market economy there is no government
involvement in economic decisions The government
lets the market answer the following three basic
economic questions
1 What Consumers decide what should
be produced in a market economy
through the purchases they make
ECOMICS UNIT
2 How Production is left entirely up to businesses
Businesses must be competitive in such an economy
and produce quality products at lower prices than
their competitors
3 For whom In a market economy the people who
have more money are able to buy more goods and
services
ECOMICS UNIT
ECOMICS UNIT
ldquoItrsquos Your money not the
governmentrsquosrdquo- President Ronald
Reagan
MARKETS
amp PRICES
FREEDOM OF
ENTERPRISE
amp CHOICE
PRIVATE
PROPERTY
ACTIVE BUT
LIMITED
GOVERNMENT
ROLE OF
SELF-INTEREST COMPETITION
ECOMICS UNIT
bull Are they truly Free Market Economies
bull Does the government regulate businesses
bull Does the government control any businesses
ECOMICS UNIT
Mixed economies combine both the private interests with the governmentrsquos interests Therersquos a balance to it bull Individuals and businesses make decisions for the
private sector
bull Government makes some decisions for the public
sector (ex regulation of monopolies)rlm
bull Governments role is greater than in a free-market
economy but less than in a command economy
bull Most economies in the world today are mixed
economies
Questional Peperoni Pizza Questional Cheese Pizza
In a Mixed Economy the government regulates
what goes into the goods we purchase in order
to protect us
And you can buy your pizza wherever you want
tohellip
bull Traditional economies only make up a small part of
a countryrsquos economy
bull There are NO PURE Market economies in the world
bull There are NO PURE Command economies in the
world
ECOMICS UNIT
All economies in the world have aspects
of both command and market
ECOMICS UNIT
All modern economies in the world are MIXED economies
But the mix is different in every nation
ECOMICS UNIT
ECOMICS UNIT
bull Tend to discourage new ideas and new ways
of doing things
bull Lack of progress lowers standard of living
bull Technology is not used difficult to improve
httpwwwyoutubecomwatchv=_iSHqUmzfKM How to build a yurt
ECOMICS UNIT
ECOMICS UNIT
Command Economy- Typically
begin with revolutions
ECOMICS UNIT
bull The government controls all aspects of the economy
bull Private property is illegal
bull Supply and demand are determined by the government not by consumers and producers
bull Everyone is paid equally no matter what job they do
bull Industry and businesses are owned and controlled by the government not private individuals
ECOMICS UNIT
In Cuba all residents are given rations of foods
Instead of purchasing food in a market Cubans go to
government food supply centers
ECOMICS UNIT
Cubarsquos Fidel Castro and Che Guevarra established a
command economy by expelling Cubarsquos small
business and land owners Many of those who lost
their business and freedom now live in Miami
ECOMICS UNIT
ECOMICS UNIT
ECOMICS UNIT
bull Because the government has total control
over production and its factors these
economies can change rapidly Whatever is
needed most will be produced
bull There is no uncertainty (people are told when
and how to work)
bull Free education health care and other public
services
bull 1) What to produce Whatever the government says to produce
bull 2) How to produce However the government tells you to produce
bull 3) For whom to produce For whomever the government tells you to produce (ideally the entire society)
ECOMICS UNIT
ECOMICS UNIT
bull Economy designed to meet needs not wants
bull No incentive to work hardhellippeople donrsquot often lose their jobs so they do the bare minimum to get by
bull Large bureaucracy means slow decision making raises cost of production lacks flexibility
bull No reward for initiative slows progress
Another disadvantage to the command economy
is that there is no incentive for
entrepreneurship when you canrsquot run your own
business
Why would people stand in line all day for one roll
of toilet paper
Moscow 1988
Command Economies
ECOMICS UNIT
Karl Marx provided the ideological foundation for this
system - most commonly known as communism
Stressed an economy controlled by the
government
You will buy
Govrsquot Inc Pizza
and you will like
it But itrsquos always
burnt I hate
their pizza
Government Inc Pizza
In a command economy consumers have very little
or no choice in what they can purchasehellip
Or even their occupation
I really enjoy workin on
the good ol farm
Not anymore you wont We need to
industrialize quickly You must move to
the city and work in the steel factory
ECOMICS UNIT
bull Basic economic questions answered by consumers
bull An economic system in which individuals own and
operate the factors of production
Adam Smith claimed that people who
trade with each other donrsquot go to war with
each other
ECOMICS UNIT
Market economies are based on the open
and free trade of goods
ECOMICS UNIT
bull USA Canada UK France etc etc
ECOMICS UNIT
bull Adjusts to change based on consumer wants
bull High degree of individual freedom
bull Low levels of government interference
bull Because individuals (with money) make the
decisions everyone (with money) has a voice in the
way the economy runs
bull Wide variety of available goods amp services
bull Many choices=high degree of consumer satisfaction
ECOMICS UNIT
bull Poverty only those with money can participate
bull Market does not provide for peoplersquos basic needs
Governments must attempt to do this (think
Katrina the tornado in Bridgeport etc)
bull High degree of uncertainty - people lose jobs
businesses fail
bull System at times puts profit before people
ECOMICS UNIT
In a pure market economy there is no government
involvement in economic decisions The government
lets the market answer the following three basic
economic questions
1 What Consumers decide what should
be produced in a market economy
through the purchases they make
ECOMICS UNIT
2 How Production is left entirely up to businesses
Businesses must be competitive in such an economy
and produce quality products at lower prices than
their competitors
3 For whom In a market economy the people who
have more money are able to buy more goods and
services
ECOMICS UNIT
ECOMICS UNIT
ldquoItrsquos Your money not the
governmentrsquosrdquo- President Ronald
Reagan
MARKETS
amp PRICES
FREEDOM OF
ENTERPRISE
amp CHOICE
PRIVATE
PROPERTY
ACTIVE BUT
LIMITED
GOVERNMENT
ROLE OF
SELF-INTEREST COMPETITION
ECOMICS UNIT
bull Are they truly Free Market Economies
bull Does the government regulate businesses
bull Does the government control any businesses
ECOMICS UNIT
Mixed economies combine both the private interests with the governmentrsquos interests Therersquos a balance to it bull Individuals and businesses make decisions for the
private sector
bull Government makes some decisions for the public
sector (ex regulation of monopolies)rlm
bull Governments role is greater than in a free-market
economy but less than in a command economy
bull Most economies in the world today are mixed
economies
Questional Peperoni Pizza Questional Cheese Pizza
In a Mixed Economy the government regulates
what goes into the goods we purchase in order
to protect us
And you can buy your pizza wherever you want
tohellip
bull Traditional economies only make up a small part of
a countryrsquos economy
bull There are NO PURE Market economies in the world
bull There are NO PURE Command economies in the
world
ECOMICS UNIT
All economies in the world have aspects
of both command and market
ECOMICS UNIT
All modern economies in the world are MIXED economies
But the mix is different in every nation
ECOMICS UNIT
httpwwwyoutubecomwatchv=_iSHqUmzfKM How to build a yurt
ECOMICS UNIT
ECOMICS UNIT
Command Economy- Typically
begin with revolutions
ECOMICS UNIT
bull The government controls all aspects of the economy
bull Private property is illegal
bull Supply and demand are determined by the government not by consumers and producers
bull Everyone is paid equally no matter what job they do
bull Industry and businesses are owned and controlled by the government not private individuals
ECOMICS UNIT
In Cuba all residents are given rations of foods
Instead of purchasing food in a market Cubans go to
government food supply centers
ECOMICS UNIT
Cubarsquos Fidel Castro and Che Guevarra established a
command economy by expelling Cubarsquos small
business and land owners Many of those who lost
their business and freedom now live in Miami
ECOMICS UNIT
ECOMICS UNIT
ECOMICS UNIT
bull Because the government has total control
over production and its factors these
economies can change rapidly Whatever is
needed most will be produced
bull There is no uncertainty (people are told when
and how to work)
bull Free education health care and other public
services
bull 1) What to produce Whatever the government says to produce
bull 2) How to produce However the government tells you to produce
bull 3) For whom to produce For whomever the government tells you to produce (ideally the entire society)
ECOMICS UNIT
ECOMICS UNIT
bull Economy designed to meet needs not wants
bull No incentive to work hardhellippeople donrsquot often lose their jobs so they do the bare minimum to get by
bull Large bureaucracy means slow decision making raises cost of production lacks flexibility
bull No reward for initiative slows progress
Another disadvantage to the command economy
is that there is no incentive for
entrepreneurship when you canrsquot run your own
business
Why would people stand in line all day for one roll
of toilet paper
Moscow 1988
Command Economies
ECOMICS UNIT
Karl Marx provided the ideological foundation for this
system - most commonly known as communism
Stressed an economy controlled by the
government
You will buy
Govrsquot Inc Pizza
and you will like
it But itrsquos always
burnt I hate
their pizza
Government Inc Pizza
In a command economy consumers have very little
or no choice in what they can purchasehellip
Or even their occupation
I really enjoy workin on
the good ol farm
Not anymore you wont We need to
industrialize quickly You must move to
the city and work in the steel factory
ECOMICS UNIT
bull Basic economic questions answered by consumers
bull An economic system in which individuals own and
operate the factors of production
Adam Smith claimed that people who
trade with each other donrsquot go to war with
each other
ECOMICS UNIT
Market economies are based on the open
and free trade of goods
ECOMICS UNIT
bull USA Canada UK France etc etc
ECOMICS UNIT
bull Adjusts to change based on consumer wants
bull High degree of individual freedom
bull Low levels of government interference
bull Because individuals (with money) make the
decisions everyone (with money) has a voice in the
way the economy runs
bull Wide variety of available goods amp services
bull Many choices=high degree of consumer satisfaction
ECOMICS UNIT
bull Poverty only those with money can participate
bull Market does not provide for peoplersquos basic needs
Governments must attempt to do this (think
Katrina the tornado in Bridgeport etc)
bull High degree of uncertainty - people lose jobs
businesses fail
bull System at times puts profit before people
ECOMICS UNIT
In a pure market economy there is no government
involvement in economic decisions The government
lets the market answer the following three basic
economic questions
1 What Consumers decide what should
be produced in a market economy
through the purchases they make
ECOMICS UNIT
2 How Production is left entirely up to businesses
Businesses must be competitive in such an economy
and produce quality products at lower prices than
their competitors
3 For whom In a market economy the people who
have more money are able to buy more goods and
services
ECOMICS UNIT
ECOMICS UNIT
ldquoItrsquos Your money not the
governmentrsquosrdquo- President Ronald
Reagan
MARKETS
amp PRICES
FREEDOM OF
ENTERPRISE
amp CHOICE
PRIVATE
PROPERTY
ACTIVE BUT
LIMITED
GOVERNMENT
ROLE OF
SELF-INTEREST COMPETITION
ECOMICS UNIT
bull Are they truly Free Market Economies
bull Does the government regulate businesses
bull Does the government control any businesses
ECOMICS UNIT
Mixed economies combine both the private interests with the governmentrsquos interests Therersquos a balance to it bull Individuals and businesses make decisions for the
private sector
bull Government makes some decisions for the public
sector (ex regulation of monopolies)rlm
bull Governments role is greater than in a free-market
economy but less than in a command economy
bull Most economies in the world today are mixed
economies
Questional Peperoni Pizza Questional Cheese Pizza
In a Mixed Economy the government regulates
what goes into the goods we purchase in order
to protect us
And you can buy your pizza wherever you want
tohellip
bull Traditional economies only make up a small part of
a countryrsquos economy
bull There are NO PURE Market economies in the world
bull There are NO PURE Command economies in the
world
ECOMICS UNIT
All economies in the world have aspects
of both command and market
ECOMICS UNIT
All modern economies in the world are MIXED economies
But the mix is different in every nation
ECOMICS UNIT
ECOMICS UNIT
Command Economy- Typically
begin with revolutions
ECOMICS UNIT
bull The government controls all aspects of the economy
bull Private property is illegal
bull Supply and demand are determined by the government not by consumers and producers
bull Everyone is paid equally no matter what job they do
bull Industry and businesses are owned and controlled by the government not private individuals
ECOMICS UNIT
In Cuba all residents are given rations of foods
Instead of purchasing food in a market Cubans go to
government food supply centers
ECOMICS UNIT
Cubarsquos Fidel Castro and Che Guevarra established a
command economy by expelling Cubarsquos small
business and land owners Many of those who lost
their business and freedom now live in Miami
ECOMICS UNIT
ECOMICS UNIT
ECOMICS UNIT
bull Because the government has total control
over production and its factors these
economies can change rapidly Whatever is
needed most will be produced
bull There is no uncertainty (people are told when
and how to work)
bull Free education health care and other public
services
bull 1) What to produce Whatever the government says to produce
bull 2) How to produce However the government tells you to produce
bull 3) For whom to produce For whomever the government tells you to produce (ideally the entire society)
ECOMICS UNIT
ECOMICS UNIT
bull Economy designed to meet needs not wants
bull No incentive to work hardhellippeople donrsquot often lose their jobs so they do the bare minimum to get by
bull Large bureaucracy means slow decision making raises cost of production lacks flexibility
bull No reward for initiative slows progress
Another disadvantage to the command economy
is that there is no incentive for
entrepreneurship when you canrsquot run your own
business
Why would people stand in line all day for one roll
of toilet paper
Moscow 1988
Command Economies
ECOMICS UNIT
Karl Marx provided the ideological foundation for this
system - most commonly known as communism
Stressed an economy controlled by the
government
You will buy
Govrsquot Inc Pizza
and you will like
it But itrsquos always
burnt I hate
their pizza
Government Inc Pizza
In a command economy consumers have very little
or no choice in what they can purchasehellip
Or even their occupation
I really enjoy workin on
the good ol farm
Not anymore you wont We need to
industrialize quickly You must move to
the city and work in the steel factory
ECOMICS UNIT
bull Basic economic questions answered by consumers
bull An economic system in which individuals own and
operate the factors of production
Adam Smith claimed that people who
trade with each other donrsquot go to war with
each other
ECOMICS UNIT
Market economies are based on the open
and free trade of goods
ECOMICS UNIT
bull USA Canada UK France etc etc
ECOMICS UNIT
bull Adjusts to change based on consumer wants
bull High degree of individual freedom
bull Low levels of government interference
bull Because individuals (with money) make the
decisions everyone (with money) has a voice in the
way the economy runs
bull Wide variety of available goods amp services
bull Many choices=high degree of consumer satisfaction
ECOMICS UNIT
bull Poverty only those with money can participate
bull Market does not provide for peoplersquos basic needs
Governments must attempt to do this (think
Katrina the tornado in Bridgeport etc)
bull High degree of uncertainty - people lose jobs
businesses fail
bull System at times puts profit before people
ECOMICS UNIT
In a pure market economy there is no government
involvement in economic decisions The government
lets the market answer the following three basic
economic questions
1 What Consumers decide what should
be produced in a market economy
through the purchases they make
ECOMICS UNIT
2 How Production is left entirely up to businesses
Businesses must be competitive in such an economy
and produce quality products at lower prices than
their competitors
3 For whom In a market economy the people who
have more money are able to buy more goods and
services
ECOMICS UNIT
ECOMICS UNIT
ldquoItrsquos Your money not the
governmentrsquosrdquo- President Ronald
Reagan
MARKETS
amp PRICES
FREEDOM OF
ENTERPRISE
amp CHOICE
PRIVATE
PROPERTY
ACTIVE BUT
LIMITED
GOVERNMENT
ROLE OF
SELF-INTEREST COMPETITION
ECOMICS UNIT
bull Are they truly Free Market Economies
bull Does the government regulate businesses
bull Does the government control any businesses
ECOMICS UNIT
Mixed economies combine both the private interests with the governmentrsquos interests Therersquos a balance to it bull Individuals and businesses make decisions for the
private sector
bull Government makes some decisions for the public
sector (ex regulation of monopolies)rlm
bull Governments role is greater than in a free-market
economy but less than in a command economy
bull Most economies in the world today are mixed
economies
Questional Peperoni Pizza Questional Cheese Pizza
In a Mixed Economy the government regulates
what goes into the goods we purchase in order
to protect us
And you can buy your pizza wherever you want
tohellip
bull Traditional economies only make up a small part of
a countryrsquos economy
bull There are NO PURE Market economies in the world
bull There are NO PURE Command economies in the
world
ECOMICS UNIT
All economies in the world have aspects
of both command and market
ECOMICS UNIT
All modern economies in the world are MIXED economies
But the mix is different in every nation
ECOMICS UNIT
ECOMICS UNIT
bull The government controls all aspects of the economy
bull Private property is illegal
bull Supply and demand are determined by the government not by consumers and producers
bull Everyone is paid equally no matter what job they do
bull Industry and businesses are owned and controlled by the government not private individuals
ECOMICS UNIT
In Cuba all residents are given rations of foods
Instead of purchasing food in a market Cubans go to
government food supply centers
ECOMICS UNIT
Cubarsquos Fidel Castro and Che Guevarra established a
command economy by expelling Cubarsquos small
business and land owners Many of those who lost
their business and freedom now live in Miami
ECOMICS UNIT
ECOMICS UNIT
ECOMICS UNIT
bull Because the government has total control
over production and its factors these
economies can change rapidly Whatever is
needed most will be produced
bull There is no uncertainty (people are told when
and how to work)
bull Free education health care and other public
services
bull 1) What to produce Whatever the government says to produce
bull 2) How to produce However the government tells you to produce
bull 3) For whom to produce For whomever the government tells you to produce (ideally the entire society)
ECOMICS UNIT
ECOMICS UNIT
bull Economy designed to meet needs not wants
bull No incentive to work hardhellippeople donrsquot often lose their jobs so they do the bare minimum to get by
bull Large bureaucracy means slow decision making raises cost of production lacks flexibility
bull No reward for initiative slows progress
Another disadvantage to the command economy
is that there is no incentive for
entrepreneurship when you canrsquot run your own
business
Why would people stand in line all day for one roll
of toilet paper
Moscow 1988
Command Economies
ECOMICS UNIT
Karl Marx provided the ideological foundation for this
system - most commonly known as communism
Stressed an economy controlled by the
government
You will buy
Govrsquot Inc Pizza
and you will like
it But itrsquos always
burnt I hate
their pizza
Government Inc Pizza
In a command economy consumers have very little
or no choice in what they can purchasehellip
Or even their occupation
I really enjoy workin on
the good ol farm
Not anymore you wont We need to
industrialize quickly You must move to
the city and work in the steel factory
ECOMICS UNIT
bull Basic economic questions answered by consumers
bull An economic system in which individuals own and
operate the factors of production
Adam Smith claimed that people who
trade with each other donrsquot go to war with
each other
ECOMICS UNIT
Market economies are based on the open
and free trade of goods
ECOMICS UNIT
bull USA Canada UK France etc etc
ECOMICS UNIT
bull Adjusts to change based on consumer wants
bull High degree of individual freedom
bull Low levels of government interference
bull Because individuals (with money) make the
decisions everyone (with money) has a voice in the
way the economy runs
bull Wide variety of available goods amp services
bull Many choices=high degree of consumer satisfaction
ECOMICS UNIT
bull Poverty only those with money can participate
bull Market does not provide for peoplersquos basic needs
Governments must attempt to do this (think
Katrina the tornado in Bridgeport etc)
bull High degree of uncertainty - people lose jobs
businesses fail
bull System at times puts profit before people
ECOMICS UNIT
In a pure market economy there is no government
involvement in economic decisions The government
lets the market answer the following three basic
economic questions
1 What Consumers decide what should
be produced in a market economy
through the purchases they make
ECOMICS UNIT
2 How Production is left entirely up to businesses
Businesses must be competitive in such an economy
and produce quality products at lower prices than
their competitors
3 For whom In a market economy the people who
have more money are able to buy more goods and
services
ECOMICS UNIT
ECOMICS UNIT
ldquoItrsquos Your money not the
governmentrsquosrdquo- President Ronald
Reagan
MARKETS
amp PRICES
FREEDOM OF
ENTERPRISE
amp CHOICE
PRIVATE
PROPERTY
ACTIVE BUT
LIMITED
GOVERNMENT
ROLE OF
SELF-INTEREST COMPETITION
ECOMICS UNIT
bull Are they truly Free Market Economies
bull Does the government regulate businesses
bull Does the government control any businesses
ECOMICS UNIT
Mixed economies combine both the private interests with the governmentrsquos interests Therersquos a balance to it bull Individuals and businesses make decisions for the
private sector
bull Government makes some decisions for the public
sector (ex regulation of monopolies)rlm
bull Governments role is greater than in a free-market
economy but less than in a command economy
bull Most economies in the world today are mixed
economies
Questional Peperoni Pizza Questional Cheese Pizza
In a Mixed Economy the government regulates
what goes into the goods we purchase in order
to protect us
And you can buy your pizza wherever you want
tohellip
bull Traditional economies only make up a small part of
a countryrsquos economy
bull There are NO PURE Market economies in the world
bull There are NO PURE Command economies in the
world
ECOMICS UNIT
All economies in the world have aspects
of both command and market
ECOMICS UNIT
All modern economies in the world are MIXED economies
But the mix is different in every nation
ECOMICS UNIT
ECOMICS UNIT
In Cuba all residents are given rations of foods
Instead of purchasing food in a market Cubans go to
government food supply centers
ECOMICS UNIT
Cubarsquos Fidel Castro and Che Guevarra established a
command economy by expelling Cubarsquos small
business and land owners Many of those who lost
their business and freedom now live in Miami
ECOMICS UNIT
ECOMICS UNIT
ECOMICS UNIT
bull Because the government has total control
over production and its factors these
economies can change rapidly Whatever is
needed most will be produced
bull There is no uncertainty (people are told when
and how to work)
bull Free education health care and other public
services
bull 1) What to produce Whatever the government says to produce
bull 2) How to produce However the government tells you to produce
bull 3) For whom to produce For whomever the government tells you to produce (ideally the entire society)
ECOMICS UNIT
ECOMICS UNIT
bull Economy designed to meet needs not wants
bull No incentive to work hardhellippeople donrsquot often lose their jobs so they do the bare minimum to get by
bull Large bureaucracy means slow decision making raises cost of production lacks flexibility
bull No reward for initiative slows progress
Another disadvantage to the command economy
is that there is no incentive for
entrepreneurship when you canrsquot run your own
business
Why would people stand in line all day for one roll
of toilet paper
Moscow 1988
Command Economies
ECOMICS UNIT
Karl Marx provided the ideological foundation for this
system - most commonly known as communism
Stressed an economy controlled by the
government
You will buy
Govrsquot Inc Pizza
and you will like
it But itrsquos always
burnt I hate
their pizza
Government Inc Pizza
In a command economy consumers have very little
or no choice in what they can purchasehellip
Or even their occupation
I really enjoy workin on
the good ol farm
Not anymore you wont We need to
industrialize quickly You must move to
the city and work in the steel factory
ECOMICS UNIT
bull Basic economic questions answered by consumers
bull An economic system in which individuals own and
operate the factors of production
Adam Smith claimed that people who
trade with each other donrsquot go to war with
each other
ECOMICS UNIT
Market economies are based on the open
and free trade of goods
ECOMICS UNIT
bull USA Canada UK France etc etc
ECOMICS UNIT
bull Adjusts to change based on consumer wants
bull High degree of individual freedom
bull Low levels of government interference
bull Because individuals (with money) make the
decisions everyone (with money) has a voice in the
way the economy runs
bull Wide variety of available goods amp services
bull Many choices=high degree of consumer satisfaction
ECOMICS UNIT
bull Poverty only those with money can participate
bull Market does not provide for peoplersquos basic needs
Governments must attempt to do this (think
Katrina the tornado in Bridgeport etc)
bull High degree of uncertainty - people lose jobs
businesses fail
bull System at times puts profit before people
ECOMICS UNIT
In a pure market economy there is no government
involvement in economic decisions The government
lets the market answer the following three basic
economic questions
1 What Consumers decide what should
be produced in a market economy
through the purchases they make
ECOMICS UNIT
2 How Production is left entirely up to businesses
Businesses must be competitive in such an economy
and produce quality products at lower prices than
their competitors
3 For whom In a market economy the people who
have more money are able to buy more goods and
services
ECOMICS UNIT
ECOMICS UNIT
ldquoItrsquos Your money not the
governmentrsquosrdquo- President Ronald
Reagan
MARKETS
amp PRICES
FREEDOM OF
ENTERPRISE
amp CHOICE
PRIVATE
PROPERTY
ACTIVE BUT
LIMITED
GOVERNMENT
ROLE OF
SELF-INTEREST COMPETITION
ECOMICS UNIT
bull Are they truly Free Market Economies
bull Does the government regulate businesses
bull Does the government control any businesses
ECOMICS UNIT
Mixed economies combine both the private interests with the governmentrsquos interests Therersquos a balance to it bull Individuals and businesses make decisions for the
private sector
bull Government makes some decisions for the public
sector (ex regulation of monopolies)rlm
bull Governments role is greater than in a free-market
economy but less than in a command economy
bull Most economies in the world today are mixed
economies
Questional Peperoni Pizza Questional Cheese Pizza
In a Mixed Economy the government regulates
what goes into the goods we purchase in order
to protect us
And you can buy your pizza wherever you want
tohellip
bull Traditional economies only make up a small part of
a countryrsquos economy
bull There are NO PURE Market economies in the world
bull There are NO PURE Command economies in the
world
ECOMICS UNIT
All economies in the world have aspects
of both command and market
ECOMICS UNIT
All modern economies in the world are MIXED economies
But the mix is different in every nation
ECOMICS UNIT
ECOMICS UNIT
Cubarsquos Fidel Castro and Che Guevarra established a
command economy by expelling Cubarsquos small
business and land owners Many of those who lost
their business and freedom now live in Miami
ECOMICS UNIT
ECOMICS UNIT
ECOMICS UNIT
bull Because the government has total control
over production and its factors these
economies can change rapidly Whatever is
needed most will be produced
bull There is no uncertainty (people are told when
and how to work)
bull Free education health care and other public
services
bull 1) What to produce Whatever the government says to produce
bull 2) How to produce However the government tells you to produce
bull 3) For whom to produce For whomever the government tells you to produce (ideally the entire society)
ECOMICS UNIT
ECOMICS UNIT
bull Economy designed to meet needs not wants
bull No incentive to work hardhellippeople donrsquot often lose their jobs so they do the bare minimum to get by
bull Large bureaucracy means slow decision making raises cost of production lacks flexibility
bull No reward for initiative slows progress
Another disadvantage to the command economy
is that there is no incentive for
entrepreneurship when you canrsquot run your own
business
Why would people stand in line all day for one roll
of toilet paper
Moscow 1988
Command Economies
ECOMICS UNIT
Karl Marx provided the ideological foundation for this
system - most commonly known as communism
Stressed an economy controlled by the
government
You will buy
Govrsquot Inc Pizza
and you will like
it But itrsquos always
burnt I hate
their pizza
Government Inc Pizza
In a command economy consumers have very little
or no choice in what they can purchasehellip
Or even their occupation
I really enjoy workin on
the good ol farm
Not anymore you wont We need to
industrialize quickly You must move to
the city and work in the steel factory
ECOMICS UNIT
bull Basic economic questions answered by consumers
bull An economic system in which individuals own and
operate the factors of production
Adam Smith claimed that people who
trade with each other donrsquot go to war with
each other
ECOMICS UNIT
Market economies are based on the open
and free trade of goods
ECOMICS UNIT
bull USA Canada UK France etc etc
ECOMICS UNIT
bull Adjusts to change based on consumer wants
bull High degree of individual freedom
bull Low levels of government interference
bull Because individuals (with money) make the
decisions everyone (with money) has a voice in the
way the economy runs
bull Wide variety of available goods amp services
bull Many choices=high degree of consumer satisfaction
ECOMICS UNIT
bull Poverty only those with money can participate
bull Market does not provide for peoplersquos basic needs
Governments must attempt to do this (think
Katrina the tornado in Bridgeport etc)
bull High degree of uncertainty - people lose jobs
businesses fail
bull System at times puts profit before people
ECOMICS UNIT
In a pure market economy there is no government
involvement in economic decisions The government
lets the market answer the following three basic
economic questions
1 What Consumers decide what should
be produced in a market economy
through the purchases they make
ECOMICS UNIT
2 How Production is left entirely up to businesses
Businesses must be competitive in such an economy
and produce quality products at lower prices than
their competitors
3 For whom In a market economy the people who
have more money are able to buy more goods and
services
ECOMICS UNIT
ECOMICS UNIT
ldquoItrsquos Your money not the
governmentrsquosrdquo- President Ronald
Reagan
MARKETS
amp PRICES
FREEDOM OF
ENTERPRISE
amp CHOICE
PRIVATE
PROPERTY
ACTIVE BUT
LIMITED
GOVERNMENT
ROLE OF
SELF-INTEREST COMPETITION
ECOMICS UNIT
bull Are they truly Free Market Economies
bull Does the government regulate businesses
bull Does the government control any businesses
ECOMICS UNIT
Mixed economies combine both the private interests with the governmentrsquos interests Therersquos a balance to it bull Individuals and businesses make decisions for the
private sector
bull Government makes some decisions for the public
sector (ex regulation of monopolies)rlm
bull Governments role is greater than in a free-market
economy but less than in a command economy
bull Most economies in the world today are mixed
economies
Questional Peperoni Pizza Questional Cheese Pizza
In a Mixed Economy the government regulates
what goes into the goods we purchase in order
to protect us
And you can buy your pizza wherever you want
tohellip
bull Traditional economies only make up a small part of
a countryrsquos economy
bull There are NO PURE Market economies in the world
bull There are NO PURE Command economies in the
world
ECOMICS UNIT
All economies in the world have aspects
of both command and market
ECOMICS UNIT
All modern economies in the world are MIXED economies
But the mix is different in every nation
ECOMICS UNIT
ECOMICS UNIT
ECOMICS UNIT
ECOMICS UNIT
bull Because the government has total control
over production and its factors these
economies can change rapidly Whatever is
needed most will be produced
bull There is no uncertainty (people are told when
and how to work)
bull Free education health care and other public
services
bull 1) What to produce Whatever the government says to produce
bull 2) How to produce However the government tells you to produce
bull 3) For whom to produce For whomever the government tells you to produce (ideally the entire society)
ECOMICS UNIT
ECOMICS UNIT
bull Economy designed to meet needs not wants
bull No incentive to work hardhellippeople donrsquot often lose their jobs so they do the bare minimum to get by
bull Large bureaucracy means slow decision making raises cost of production lacks flexibility
bull No reward for initiative slows progress
Another disadvantage to the command economy
is that there is no incentive for
entrepreneurship when you canrsquot run your own
business
Why would people stand in line all day for one roll
of toilet paper
Moscow 1988
Command Economies
ECOMICS UNIT
Karl Marx provided the ideological foundation for this
system - most commonly known as communism
Stressed an economy controlled by the
government
You will buy
Govrsquot Inc Pizza
and you will like
it But itrsquos always
burnt I hate
their pizza
Government Inc Pizza
In a command economy consumers have very little
or no choice in what they can purchasehellip
Or even their occupation
I really enjoy workin on
the good ol farm
Not anymore you wont We need to
industrialize quickly You must move to
the city and work in the steel factory
ECOMICS UNIT
bull Basic economic questions answered by consumers
bull An economic system in which individuals own and
operate the factors of production
Adam Smith claimed that people who
trade with each other donrsquot go to war with
each other
ECOMICS UNIT
Market economies are based on the open
and free trade of goods
ECOMICS UNIT
bull USA Canada UK France etc etc
ECOMICS UNIT
bull Adjusts to change based on consumer wants
bull High degree of individual freedom
bull Low levels of government interference
bull Because individuals (with money) make the
decisions everyone (with money) has a voice in the
way the economy runs
bull Wide variety of available goods amp services
bull Many choices=high degree of consumer satisfaction
ECOMICS UNIT
bull Poverty only those with money can participate
bull Market does not provide for peoplersquos basic needs
Governments must attempt to do this (think
Katrina the tornado in Bridgeport etc)
bull High degree of uncertainty - people lose jobs
businesses fail
bull System at times puts profit before people
ECOMICS UNIT
In a pure market economy there is no government
involvement in economic decisions The government
lets the market answer the following three basic
economic questions
1 What Consumers decide what should
be produced in a market economy
through the purchases they make
ECOMICS UNIT
2 How Production is left entirely up to businesses
Businesses must be competitive in such an economy
and produce quality products at lower prices than
their competitors
3 For whom In a market economy the people who
have more money are able to buy more goods and
services
ECOMICS UNIT
ECOMICS UNIT
ldquoItrsquos Your money not the
governmentrsquosrdquo- President Ronald
Reagan
MARKETS
amp PRICES
FREEDOM OF
ENTERPRISE
amp CHOICE
PRIVATE
PROPERTY
ACTIVE BUT
LIMITED
GOVERNMENT
ROLE OF
SELF-INTEREST COMPETITION
ECOMICS UNIT
bull Are they truly Free Market Economies
bull Does the government regulate businesses
bull Does the government control any businesses
ECOMICS UNIT
Mixed economies combine both the private interests with the governmentrsquos interests Therersquos a balance to it bull Individuals and businesses make decisions for the
private sector
bull Government makes some decisions for the public
sector (ex regulation of monopolies)rlm
bull Governments role is greater than in a free-market
economy but less than in a command economy
bull Most economies in the world today are mixed
economies
Questional Peperoni Pizza Questional Cheese Pizza
In a Mixed Economy the government regulates
what goes into the goods we purchase in order
to protect us
And you can buy your pizza wherever you want
tohellip
bull Traditional economies only make up a small part of
a countryrsquos economy
bull There are NO PURE Market economies in the world
bull There are NO PURE Command economies in the
world
ECOMICS UNIT
All economies in the world have aspects
of both command and market
ECOMICS UNIT
All modern economies in the world are MIXED economies
But the mix is different in every nation
ECOMICS UNIT
ECOMICS UNIT
ECOMICS UNIT
bull Because the government has total control
over production and its factors these
economies can change rapidly Whatever is
needed most will be produced
bull There is no uncertainty (people are told when
and how to work)
bull Free education health care and other public
services
bull 1) What to produce Whatever the government says to produce
bull 2) How to produce However the government tells you to produce
bull 3) For whom to produce For whomever the government tells you to produce (ideally the entire society)
ECOMICS UNIT
ECOMICS UNIT
bull Economy designed to meet needs not wants
bull No incentive to work hardhellippeople donrsquot often lose their jobs so they do the bare minimum to get by
bull Large bureaucracy means slow decision making raises cost of production lacks flexibility
bull No reward for initiative slows progress
Another disadvantage to the command economy
is that there is no incentive for
entrepreneurship when you canrsquot run your own
business
Why would people stand in line all day for one roll
of toilet paper
Moscow 1988
Command Economies
ECOMICS UNIT
Karl Marx provided the ideological foundation for this
system - most commonly known as communism
Stressed an economy controlled by the
government
You will buy
Govrsquot Inc Pizza
and you will like
it But itrsquos always
burnt I hate
their pizza
Government Inc Pizza
In a command economy consumers have very little
or no choice in what they can purchasehellip
Or even their occupation
I really enjoy workin on
the good ol farm
Not anymore you wont We need to
industrialize quickly You must move to
the city and work in the steel factory
ECOMICS UNIT
bull Basic economic questions answered by consumers
bull An economic system in which individuals own and
operate the factors of production
Adam Smith claimed that people who
trade with each other donrsquot go to war with
each other
ECOMICS UNIT
Market economies are based on the open
and free trade of goods
ECOMICS UNIT
bull USA Canada UK France etc etc
ECOMICS UNIT
bull Adjusts to change based on consumer wants
bull High degree of individual freedom
bull Low levels of government interference
bull Because individuals (with money) make the
decisions everyone (with money) has a voice in the
way the economy runs
bull Wide variety of available goods amp services
bull Many choices=high degree of consumer satisfaction
ECOMICS UNIT
bull Poverty only those with money can participate
bull Market does not provide for peoplersquos basic needs
Governments must attempt to do this (think
Katrina the tornado in Bridgeport etc)
bull High degree of uncertainty - people lose jobs
businesses fail
bull System at times puts profit before people
ECOMICS UNIT
In a pure market economy there is no government
involvement in economic decisions The government
lets the market answer the following three basic
economic questions
1 What Consumers decide what should
be produced in a market economy
through the purchases they make
ECOMICS UNIT
2 How Production is left entirely up to businesses
Businesses must be competitive in such an economy
and produce quality products at lower prices than
their competitors
3 For whom In a market economy the people who
have more money are able to buy more goods and
services
ECOMICS UNIT
ECOMICS UNIT
ldquoItrsquos Your money not the
governmentrsquosrdquo- President Ronald
Reagan
MARKETS
amp PRICES
FREEDOM OF
ENTERPRISE
amp CHOICE
PRIVATE
PROPERTY
ACTIVE BUT
LIMITED
GOVERNMENT
ROLE OF
SELF-INTEREST COMPETITION
ECOMICS UNIT
bull Are they truly Free Market Economies
bull Does the government regulate businesses
bull Does the government control any businesses
ECOMICS UNIT
Mixed economies combine both the private interests with the governmentrsquos interests Therersquos a balance to it bull Individuals and businesses make decisions for the
private sector
bull Government makes some decisions for the public
sector (ex regulation of monopolies)rlm
bull Governments role is greater than in a free-market
economy but less than in a command economy
bull Most economies in the world today are mixed
economies
Questional Peperoni Pizza Questional Cheese Pizza
In a Mixed Economy the government regulates
what goes into the goods we purchase in order
to protect us
And you can buy your pizza wherever you want
tohellip
bull Traditional economies only make up a small part of
a countryrsquos economy
bull There are NO PURE Market economies in the world
bull There are NO PURE Command economies in the
world
ECOMICS UNIT
All economies in the world have aspects
of both command and market
ECOMICS UNIT
All modern economies in the world are MIXED economies
But the mix is different in every nation
ECOMICS UNIT
ECOMICS UNIT
bull Because the government has total control
over production and its factors these
economies can change rapidly Whatever is
needed most will be produced
bull There is no uncertainty (people are told when
and how to work)
bull Free education health care and other public
services
bull 1) What to produce Whatever the government says to produce
bull 2) How to produce However the government tells you to produce
bull 3) For whom to produce For whomever the government tells you to produce (ideally the entire society)
ECOMICS UNIT
ECOMICS UNIT
bull Economy designed to meet needs not wants
bull No incentive to work hardhellippeople donrsquot often lose their jobs so they do the bare minimum to get by
bull Large bureaucracy means slow decision making raises cost of production lacks flexibility
bull No reward for initiative slows progress
Another disadvantage to the command economy
is that there is no incentive for
entrepreneurship when you canrsquot run your own
business
Why would people stand in line all day for one roll
of toilet paper
Moscow 1988
Command Economies
ECOMICS UNIT
Karl Marx provided the ideological foundation for this
system - most commonly known as communism
Stressed an economy controlled by the
government
You will buy
Govrsquot Inc Pizza
and you will like
it But itrsquos always
burnt I hate
their pizza
Government Inc Pizza
In a command economy consumers have very little
or no choice in what they can purchasehellip
Or even their occupation
I really enjoy workin on
the good ol farm
Not anymore you wont We need to
industrialize quickly You must move to
the city and work in the steel factory
ECOMICS UNIT
bull Basic economic questions answered by consumers
bull An economic system in which individuals own and
operate the factors of production
Adam Smith claimed that people who
trade with each other donrsquot go to war with
each other
ECOMICS UNIT
Market economies are based on the open
and free trade of goods
ECOMICS UNIT
bull USA Canada UK France etc etc
ECOMICS UNIT
bull Adjusts to change based on consumer wants
bull High degree of individual freedom
bull Low levels of government interference
bull Because individuals (with money) make the
decisions everyone (with money) has a voice in the
way the economy runs
bull Wide variety of available goods amp services
bull Many choices=high degree of consumer satisfaction
ECOMICS UNIT
bull Poverty only those with money can participate
bull Market does not provide for peoplersquos basic needs
Governments must attempt to do this (think
Katrina the tornado in Bridgeport etc)
bull High degree of uncertainty - people lose jobs
businesses fail
bull System at times puts profit before people
ECOMICS UNIT
In a pure market economy there is no government
involvement in economic decisions The government
lets the market answer the following three basic
economic questions
1 What Consumers decide what should
be produced in a market economy
through the purchases they make
ECOMICS UNIT
2 How Production is left entirely up to businesses
Businesses must be competitive in such an economy
and produce quality products at lower prices than
their competitors
3 For whom In a market economy the people who
have more money are able to buy more goods and
services
ECOMICS UNIT
ECOMICS UNIT
ldquoItrsquos Your money not the
governmentrsquosrdquo- President Ronald
Reagan
MARKETS
amp PRICES
FREEDOM OF
ENTERPRISE
amp CHOICE
PRIVATE
PROPERTY
ACTIVE BUT
LIMITED
GOVERNMENT
ROLE OF
SELF-INTEREST COMPETITION
ECOMICS UNIT
bull Are they truly Free Market Economies
bull Does the government regulate businesses
bull Does the government control any businesses
ECOMICS UNIT
Mixed economies combine both the private interests with the governmentrsquos interests Therersquos a balance to it bull Individuals and businesses make decisions for the
private sector
bull Government makes some decisions for the public
sector (ex regulation of monopolies)rlm
bull Governments role is greater than in a free-market
economy but less than in a command economy
bull Most economies in the world today are mixed
economies
Questional Peperoni Pizza Questional Cheese Pizza
In a Mixed Economy the government regulates
what goes into the goods we purchase in order
to protect us
And you can buy your pizza wherever you want
tohellip
bull Traditional economies only make up a small part of
a countryrsquos economy
bull There are NO PURE Market economies in the world
bull There are NO PURE Command economies in the
world
ECOMICS UNIT
All economies in the world have aspects
of both command and market
ECOMICS UNIT
All modern economies in the world are MIXED economies
But the mix is different in every nation
ECOMICS UNIT
bull 1) What to produce Whatever the government says to produce
bull 2) How to produce However the government tells you to produce
bull 3) For whom to produce For whomever the government tells you to produce (ideally the entire society)
ECOMICS UNIT
ECOMICS UNIT
bull Economy designed to meet needs not wants
bull No incentive to work hardhellippeople donrsquot often lose their jobs so they do the bare minimum to get by
bull Large bureaucracy means slow decision making raises cost of production lacks flexibility
bull No reward for initiative slows progress
Another disadvantage to the command economy
is that there is no incentive for
entrepreneurship when you canrsquot run your own
business
Why would people stand in line all day for one roll
of toilet paper
Moscow 1988
Command Economies
ECOMICS UNIT
Karl Marx provided the ideological foundation for this
system - most commonly known as communism
Stressed an economy controlled by the
government
You will buy
Govrsquot Inc Pizza
and you will like
it But itrsquos always
burnt I hate
their pizza
Government Inc Pizza
In a command economy consumers have very little
or no choice in what they can purchasehellip
Or even their occupation
I really enjoy workin on
the good ol farm
Not anymore you wont We need to
industrialize quickly You must move to
the city and work in the steel factory
ECOMICS UNIT
bull Basic economic questions answered by consumers
bull An economic system in which individuals own and
operate the factors of production
Adam Smith claimed that people who
trade with each other donrsquot go to war with
each other
ECOMICS UNIT
Market economies are based on the open
and free trade of goods
ECOMICS UNIT
bull USA Canada UK France etc etc
ECOMICS UNIT
bull Adjusts to change based on consumer wants
bull High degree of individual freedom
bull Low levels of government interference
bull Because individuals (with money) make the
decisions everyone (with money) has a voice in the
way the economy runs
bull Wide variety of available goods amp services
bull Many choices=high degree of consumer satisfaction
ECOMICS UNIT
bull Poverty only those with money can participate
bull Market does not provide for peoplersquos basic needs
Governments must attempt to do this (think
Katrina the tornado in Bridgeport etc)
bull High degree of uncertainty - people lose jobs
businesses fail
bull System at times puts profit before people
ECOMICS UNIT
In a pure market economy there is no government
involvement in economic decisions The government
lets the market answer the following three basic
economic questions
1 What Consumers decide what should
be produced in a market economy
through the purchases they make
ECOMICS UNIT
2 How Production is left entirely up to businesses
Businesses must be competitive in such an economy
and produce quality products at lower prices than
their competitors
3 For whom In a market economy the people who
have more money are able to buy more goods and
services
ECOMICS UNIT
ECOMICS UNIT
ldquoItrsquos Your money not the
governmentrsquosrdquo- President Ronald
Reagan
MARKETS
amp PRICES
FREEDOM OF
ENTERPRISE
amp CHOICE
PRIVATE
PROPERTY
ACTIVE BUT
LIMITED
GOVERNMENT
ROLE OF
SELF-INTEREST COMPETITION
ECOMICS UNIT
bull Are they truly Free Market Economies
bull Does the government regulate businesses
bull Does the government control any businesses
ECOMICS UNIT
Mixed economies combine both the private interests with the governmentrsquos interests Therersquos a balance to it bull Individuals and businesses make decisions for the
private sector
bull Government makes some decisions for the public
sector (ex regulation of monopolies)rlm
bull Governments role is greater than in a free-market
economy but less than in a command economy
bull Most economies in the world today are mixed
economies
Questional Peperoni Pizza Questional Cheese Pizza
In a Mixed Economy the government regulates
what goes into the goods we purchase in order
to protect us
And you can buy your pizza wherever you want
tohellip
bull Traditional economies only make up a small part of
a countryrsquos economy
bull There are NO PURE Market economies in the world
bull There are NO PURE Command economies in the
world
ECOMICS UNIT
All economies in the world have aspects
of both command and market
ECOMICS UNIT
All modern economies in the world are MIXED economies
But the mix is different in every nation
ECOMICS UNIT
ECOMICS UNIT
bull Economy designed to meet needs not wants
bull No incentive to work hardhellippeople donrsquot often lose their jobs so they do the bare minimum to get by
bull Large bureaucracy means slow decision making raises cost of production lacks flexibility
bull No reward for initiative slows progress
Another disadvantage to the command economy
is that there is no incentive for
entrepreneurship when you canrsquot run your own
business
Why would people stand in line all day for one roll
of toilet paper
Moscow 1988
Command Economies
ECOMICS UNIT
Karl Marx provided the ideological foundation for this
system - most commonly known as communism
Stressed an economy controlled by the
government
You will buy
Govrsquot Inc Pizza
and you will like
it But itrsquos always
burnt I hate
their pizza
Government Inc Pizza
In a command economy consumers have very little
or no choice in what they can purchasehellip
Or even their occupation
I really enjoy workin on
the good ol farm
Not anymore you wont We need to
industrialize quickly You must move to
the city and work in the steel factory
ECOMICS UNIT
bull Basic economic questions answered by consumers
bull An economic system in which individuals own and
operate the factors of production
Adam Smith claimed that people who
trade with each other donrsquot go to war with
each other
ECOMICS UNIT
Market economies are based on the open
and free trade of goods
ECOMICS UNIT
bull USA Canada UK France etc etc
ECOMICS UNIT
bull Adjusts to change based on consumer wants
bull High degree of individual freedom
bull Low levels of government interference
bull Because individuals (with money) make the
decisions everyone (with money) has a voice in the
way the economy runs
bull Wide variety of available goods amp services
bull Many choices=high degree of consumer satisfaction
ECOMICS UNIT
bull Poverty only those with money can participate
bull Market does not provide for peoplersquos basic needs
Governments must attempt to do this (think
Katrina the tornado in Bridgeport etc)
bull High degree of uncertainty - people lose jobs
businesses fail
bull System at times puts profit before people
ECOMICS UNIT
In a pure market economy there is no government
involvement in economic decisions The government
lets the market answer the following three basic
economic questions
1 What Consumers decide what should
be produced in a market economy
through the purchases they make
ECOMICS UNIT
2 How Production is left entirely up to businesses
Businesses must be competitive in such an economy
and produce quality products at lower prices than
their competitors
3 For whom In a market economy the people who
have more money are able to buy more goods and
services
ECOMICS UNIT
ECOMICS UNIT
ldquoItrsquos Your money not the
governmentrsquosrdquo- President Ronald
Reagan
MARKETS
amp PRICES
FREEDOM OF
ENTERPRISE
amp CHOICE
PRIVATE
PROPERTY
ACTIVE BUT
LIMITED
GOVERNMENT
ROLE OF
SELF-INTEREST COMPETITION
ECOMICS UNIT
bull Are they truly Free Market Economies
bull Does the government regulate businesses
bull Does the government control any businesses
ECOMICS UNIT
Mixed economies combine both the private interests with the governmentrsquos interests Therersquos a balance to it bull Individuals and businesses make decisions for the
private sector
bull Government makes some decisions for the public
sector (ex regulation of monopolies)rlm
bull Governments role is greater than in a free-market
economy but less than in a command economy
bull Most economies in the world today are mixed
economies
Questional Peperoni Pizza Questional Cheese Pizza
In a Mixed Economy the government regulates
what goes into the goods we purchase in order
to protect us
And you can buy your pizza wherever you want
tohellip
bull Traditional economies only make up a small part of
a countryrsquos economy
bull There are NO PURE Market economies in the world
bull There are NO PURE Command economies in the
world
ECOMICS UNIT
All economies in the world have aspects
of both command and market
ECOMICS UNIT
All modern economies in the world are MIXED economies
But the mix is different in every nation
ECOMICS UNIT
Why would people stand in line all day for one roll
of toilet paper
Moscow 1988
Command Economies
ECOMICS UNIT
Karl Marx provided the ideological foundation for this
system - most commonly known as communism
Stressed an economy controlled by the
government
You will buy
Govrsquot Inc Pizza
and you will like
it But itrsquos always
burnt I hate
their pizza
Government Inc Pizza
In a command economy consumers have very little
or no choice in what they can purchasehellip
Or even their occupation
I really enjoy workin on
the good ol farm
Not anymore you wont We need to
industrialize quickly You must move to
the city and work in the steel factory
ECOMICS UNIT
bull Basic economic questions answered by consumers
bull An economic system in which individuals own and
operate the factors of production
Adam Smith claimed that people who
trade with each other donrsquot go to war with
each other
ECOMICS UNIT
Market economies are based on the open
and free trade of goods
ECOMICS UNIT
bull USA Canada UK France etc etc
ECOMICS UNIT
bull Adjusts to change based on consumer wants
bull High degree of individual freedom
bull Low levels of government interference
bull Because individuals (with money) make the
decisions everyone (with money) has a voice in the
way the economy runs
bull Wide variety of available goods amp services
bull Many choices=high degree of consumer satisfaction
ECOMICS UNIT
bull Poverty only those with money can participate
bull Market does not provide for peoplersquos basic needs
Governments must attempt to do this (think
Katrina the tornado in Bridgeport etc)
bull High degree of uncertainty - people lose jobs
businesses fail
bull System at times puts profit before people
ECOMICS UNIT
In a pure market economy there is no government
involvement in economic decisions The government
lets the market answer the following three basic
economic questions
1 What Consumers decide what should
be produced in a market economy
through the purchases they make
ECOMICS UNIT
2 How Production is left entirely up to businesses
Businesses must be competitive in such an economy
and produce quality products at lower prices than
their competitors
3 For whom In a market economy the people who
have more money are able to buy more goods and
services
ECOMICS UNIT
ECOMICS UNIT
ldquoItrsquos Your money not the
governmentrsquosrdquo- President Ronald
Reagan
MARKETS
amp PRICES
FREEDOM OF
ENTERPRISE
amp CHOICE
PRIVATE
PROPERTY
ACTIVE BUT
LIMITED
GOVERNMENT
ROLE OF
SELF-INTEREST COMPETITION
ECOMICS UNIT
bull Are they truly Free Market Economies
bull Does the government regulate businesses
bull Does the government control any businesses
ECOMICS UNIT
Mixed economies combine both the private interests with the governmentrsquos interests Therersquos a balance to it bull Individuals and businesses make decisions for the
private sector
bull Government makes some decisions for the public
sector (ex regulation of monopolies)rlm
bull Governments role is greater than in a free-market
economy but less than in a command economy
bull Most economies in the world today are mixed
economies
Questional Peperoni Pizza Questional Cheese Pizza
In a Mixed Economy the government regulates
what goes into the goods we purchase in order
to protect us
And you can buy your pizza wherever you want
tohellip
bull Traditional economies only make up a small part of
a countryrsquos economy
bull There are NO PURE Market economies in the world
bull There are NO PURE Command economies in the
world
ECOMICS UNIT
All economies in the world have aspects
of both command and market
ECOMICS UNIT
All modern economies in the world are MIXED economies
But the mix is different in every nation
ECOMICS UNIT
ECOMICS UNIT
Karl Marx provided the ideological foundation for this
system - most commonly known as communism
Stressed an economy controlled by the
government
You will buy
Govrsquot Inc Pizza
and you will like
it But itrsquos always
burnt I hate
their pizza
Government Inc Pizza
In a command economy consumers have very little
or no choice in what they can purchasehellip
Or even their occupation
I really enjoy workin on
the good ol farm
Not anymore you wont We need to
industrialize quickly You must move to
the city and work in the steel factory
ECOMICS UNIT
bull Basic economic questions answered by consumers
bull An economic system in which individuals own and
operate the factors of production
Adam Smith claimed that people who
trade with each other donrsquot go to war with
each other
ECOMICS UNIT
Market economies are based on the open
and free trade of goods
ECOMICS UNIT
bull USA Canada UK France etc etc
ECOMICS UNIT
bull Adjusts to change based on consumer wants
bull High degree of individual freedom
bull Low levels of government interference
bull Because individuals (with money) make the
decisions everyone (with money) has a voice in the
way the economy runs
bull Wide variety of available goods amp services
bull Many choices=high degree of consumer satisfaction
ECOMICS UNIT
bull Poverty only those with money can participate
bull Market does not provide for peoplersquos basic needs
Governments must attempt to do this (think
Katrina the tornado in Bridgeport etc)
bull High degree of uncertainty - people lose jobs
businesses fail
bull System at times puts profit before people
ECOMICS UNIT
In a pure market economy there is no government
involvement in economic decisions The government
lets the market answer the following three basic
economic questions
1 What Consumers decide what should
be produced in a market economy
through the purchases they make
ECOMICS UNIT
2 How Production is left entirely up to businesses
Businesses must be competitive in such an economy
and produce quality products at lower prices than
their competitors
3 For whom In a market economy the people who
have more money are able to buy more goods and
services
ECOMICS UNIT
ECOMICS UNIT
ldquoItrsquos Your money not the
governmentrsquosrdquo- President Ronald
Reagan
MARKETS
amp PRICES
FREEDOM OF
ENTERPRISE
amp CHOICE
PRIVATE
PROPERTY
ACTIVE BUT
LIMITED
GOVERNMENT
ROLE OF
SELF-INTEREST COMPETITION
ECOMICS UNIT
bull Are they truly Free Market Economies
bull Does the government regulate businesses
bull Does the government control any businesses
ECOMICS UNIT
Mixed economies combine both the private interests with the governmentrsquos interests Therersquos a balance to it bull Individuals and businesses make decisions for the
private sector
bull Government makes some decisions for the public
sector (ex regulation of monopolies)rlm
bull Governments role is greater than in a free-market
economy but less than in a command economy
bull Most economies in the world today are mixed
economies
Questional Peperoni Pizza Questional Cheese Pizza
In a Mixed Economy the government regulates
what goes into the goods we purchase in order
to protect us
And you can buy your pizza wherever you want
tohellip
bull Traditional economies only make up a small part of
a countryrsquos economy
bull There are NO PURE Market economies in the world
bull There are NO PURE Command economies in the
world
ECOMICS UNIT
All economies in the world have aspects
of both command and market
ECOMICS UNIT
All modern economies in the world are MIXED economies
But the mix is different in every nation
ECOMICS UNIT
You will buy
Govrsquot Inc Pizza
and you will like
it But itrsquos always
burnt I hate
their pizza
Government Inc Pizza
In a command economy consumers have very little
or no choice in what they can purchasehellip
Or even their occupation
I really enjoy workin on
the good ol farm
Not anymore you wont We need to
industrialize quickly You must move to
the city and work in the steel factory
ECOMICS UNIT
bull Basic economic questions answered by consumers
bull An economic system in which individuals own and
operate the factors of production
Adam Smith claimed that people who
trade with each other donrsquot go to war with
each other
ECOMICS UNIT
Market economies are based on the open
and free trade of goods
ECOMICS UNIT
bull USA Canada UK France etc etc
ECOMICS UNIT
bull Adjusts to change based on consumer wants
bull High degree of individual freedom
bull Low levels of government interference
bull Because individuals (with money) make the
decisions everyone (with money) has a voice in the
way the economy runs
bull Wide variety of available goods amp services
bull Many choices=high degree of consumer satisfaction
ECOMICS UNIT
bull Poverty only those with money can participate
bull Market does not provide for peoplersquos basic needs
Governments must attempt to do this (think
Katrina the tornado in Bridgeport etc)
bull High degree of uncertainty - people lose jobs
businesses fail
bull System at times puts profit before people
ECOMICS UNIT
In a pure market economy there is no government
involvement in economic decisions The government
lets the market answer the following three basic
economic questions
1 What Consumers decide what should
be produced in a market economy
through the purchases they make
ECOMICS UNIT
2 How Production is left entirely up to businesses
Businesses must be competitive in such an economy
and produce quality products at lower prices than
their competitors
3 For whom In a market economy the people who
have more money are able to buy more goods and
services
ECOMICS UNIT
ECOMICS UNIT
ldquoItrsquos Your money not the
governmentrsquosrdquo- President Ronald
Reagan
MARKETS
amp PRICES
FREEDOM OF
ENTERPRISE
amp CHOICE
PRIVATE
PROPERTY
ACTIVE BUT
LIMITED
GOVERNMENT
ROLE OF
SELF-INTEREST COMPETITION
ECOMICS UNIT
bull Are they truly Free Market Economies
bull Does the government regulate businesses
bull Does the government control any businesses
ECOMICS UNIT
Mixed economies combine both the private interests with the governmentrsquos interests Therersquos a balance to it bull Individuals and businesses make decisions for the
private sector
bull Government makes some decisions for the public
sector (ex regulation of monopolies)rlm
bull Governments role is greater than in a free-market
economy but less than in a command economy
bull Most economies in the world today are mixed
economies
Questional Peperoni Pizza Questional Cheese Pizza
In a Mixed Economy the government regulates
what goes into the goods we purchase in order
to protect us
And you can buy your pizza wherever you want
tohellip
bull Traditional economies only make up a small part of
a countryrsquos economy
bull There are NO PURE Market economies in the world
bull There are NO PURE Command economies in the
world
ECOMICS UNIT
All economies in the world have aspects
of both command and market
ECOMICS UNIT
All modern economies in the world are MIXED economies
But the mix is different in every nation
ECOMICS UNIT
Or even their occupation
I really enjoy workin on
the good ol farm
Not anymore you wont We need to
industrialize quickly You must move to
the city and work in the steel factory
ECOMICS UNIT
bull Basic economic questions answered by consumers
bull An economic system in which individuals own and
operate the factors of production
Adam Smith claimed that people who
trade with each other donrsquot go to war with
each other
ECOMICS UNIT
Market economies are based on the open
and free trade of goods
ECOMICS UNIT
bull USA Canada UK France etc etc
ECOMICS UNIT
bull Adjusts to change based on consumer wants
bull High degree of individual freedom
bull Low levels of government interference
bull Because individuals (with money) make the
decisions everyone (with money) has a voice in the
way the economy runs
bull Wide variety of available goods amp services
bull Many choices=high degree of consumer satisfaction
ECOMICS UNIT
bull Poverty only those with money can participate
bull Market does not provide for peoplersquos basic needs
Governments must attempt to do this (think
Katrina the tornado in Bridgeport etc)
bull High degree of uncertainty - people lose jobs
businesses fail
bull System at times puts profit before people
ECOMICS UNIT
In a pure market economy there is no government
involvement in economic decisions The government
lets the market answer the following three basic
economic questions
1 What Consumers decide what should
be produced in a market economy
through the purchases they make
ECOMICS UNIT
2 How Production is left entirely up to businesses
Businesses must be competitive in such an economy
and produce quality products at lower prices than
their competitors
3 For whom In a market economy the people who
have more money are able to buy more goods and
services
ECOMICS UNIT
ECOMICS UNIT
ldquoItrsquos Your money not the
governmentrsquosrdquo- President Ronald
Reagan
MARKETS
amp PRICES
FREEDOM OF
ENTERPRISE
amp CHOICE
PRIVATE
PROPERTY
ACTIVE BUT
LIMITED
GOVERNMENT
ROLE OF
SELF-INTEREST COMPETITION
ECOMICS UNIT
bull Are they truly Free Market Economies
bull Does the government regulate businesses
bull Does the government control any businesses
ECOMICS UNIT
Mixed economies combine both the private interests with the governmentrsquos interests Therersquos a balance to it bull Individuals and businesses make decisions for the
private sector
bull Government makes some decisions for the public
sector (ex regulation of monopolies)rlm
bull Governments role is greater than in a free-market
economy but less than in a command economy
bull Most economies in the world today are mixed
economies
Questional Peperoni Pizza Questional Cheese Pizza
In a Mixed Economy the government regulates
what goes into the goods we purchase in order
to protect us
And you can buy your pizza wherever you want
tohellip
bull Traditional economies only make up a small part of
a countryrsquos economy
bull There are NO PURE Market economies in the world
bull There are NO PURE Command economies in the
world
ECOMICS UNIT
All economies in the world have aspects
of both command and market
ECOMICS UNIT
All modern economies in the world are MIXED economies
But the mix is different in every nation
ECOMICS UNIT
ECOMICS UNIT
bull Basic economic questions answered by consumers
bull An economic system in which individuals own and
operate the factors of production
Adam Smith claimed that people who
trade with each other donrsquot go to war with
each other
ECOMICS UNIT
Market economies are based on the open
and free trade of goods
ECOMICS UNIT
bull USA Canada UK France etc etc
ECOMICS UNIT
bull Adjusts to change based on consumer wants
bull High degree of individual freedom
bull Low levels of government interference
bull Because individuals (with money) make the
decisions everyone (with money) has a voice in the
way the economy runs
bull Wide variety of available goods amp services
bull Many choices=high degree of consumer satisfaction
ECOMICS UNIT
bull Poverty only those with money can participate
bull Market does not provide for peoplersquos basic needs
Governments must attempt to do this (think
Katrina the tornado in Bridgeport etc)
bull High degree of uncertainty - people lose jobs
businesses fail
bull System at times puts profit before people
ECOMICS UNIT
In a pure market economy there is no government
involvement in economic decisions The government
lets the market answer the following three basic
economic questions
1 What Consumers decide what should
be produced in a market economy
through the purchases they make
ECOMICS UNIT
2 How Production is left entirely up to businesses
Businesses must be competitive in such an economy
and produce quality products at lower prices than
their competitors
3 For whom In a market economy the people who
have more money are able to buy more goods and
services
ECOMICS UNIT
ECOMICS UNIT
ldquoItrsquos Your money not the
governmentrsquosrdquo- President Ronald
Reagan
MARKETS
amp PRICES
FREEDOM OF
ENTERPRISE
amp CHOICE
PRIVATE
PROPERTY
ACTIVE BUT
LIMITED
GOVERNMENT
ROLE OF
SELF-INTEREST COMPETITION
ECOMICS UNIT
bull Are they truly Free Market Economies
bull Does the government regulate businesses
bull Does the government control any businesses
ECOMICS UNIT
Mixed economies combine both the private interests with the governmentrsquos interests Therersquos a balance to it bull Individuals and businesses make decisions for the
private sector
bull Government makes some decisions for the public
sector (ex regulation of monopolies)rlm
bull Governments role is greater than in a free-market
economy but less than in a command economy
bull Most economies in the world today are mixed
economies
Questional Peperoni Pizza Questional Cheese Pizza
In a Mixed Economy the government regulates
what goes into the goods we purchase in order
to protect us
And you can buy your pizza wherever you want
tohellip
bull Traditional economies only make up a small part of
a countryrsquos economy
bull There are NO PURE Market economies in the world
bull There are NO PURE Command economies in the
world
ECOMICS UNIT
All economies in the world have aspects
of both command and market
ECOMICS UNIT
All modern economies in the world are MIXED economies
But the mix is different in every nation
ECOMICS UNIT
ECOMICS UNIT
Market economies are based on the open
and free trade of goods
ECOMICS UNIT
bull USA Canada UK France etc etc
ECOMICS UNIT
bull Adjusts to change based on consumer wants
bull High degree of individual freedom
bull Low levels of government interference
bull Because individuals (with money) make the
decisions everyone (with money) has a voice in the
way the economy runs
bull Wide variety of available goods amp services
bull Many choices=high degree of consumer satisfaction
ECOMICS UNIT
bull Poverty only those with money can participate
bull Market does not provide for peoplersquos basic needs
Governments must attempt to do this (think
Katrina the tornado in Bridgeport etc)
bull High degree of uncertainty - people lose jobs
businesses fail
bull System at times puts profit before people
ECOMICS UNIT
In a pure market economy there is no government
involvement in economic decisions The government
lets the market answer the following three basic
economic questions
1 What Consumers decide what should
be produced in a market economy
through the purchases they make
ECOMICS UNIT
2 How Production is left entirely up to businesses
Businesses must be competitive in such an economy
and produce quality products at lower prices than
their competitors
3 For whom In a market economy the people who
have more money are able to buy more goods and
services
ECOMICS UNIT
ECOMICS UNIT
ldquoItrsquos Your money not the
governmentrsquosrdquo- President Ronald
Reagan
MARKETS
amp PRICES
FREEDOM OF
ENTERPRISE
amp CHOICE
PRIVATE
PROPERTY
ACTIVE BUT
LIMITED
GOVERNMENT
ROLE OF
SELF-INTEREST COMPETITION
ECOMICS UNIT
bull Are they truly Free Market Economies
bull Does the government regulate businesses
bull Does the government control any businesses
ECOMICS UNIT
Mixed economies combine both the private interests with the governmentrsquos interests Therersquos a balance to it bull Individuals and businesses make decisions for the
private sector
bull Government makes some decisions for the public
sector (ex regulation of monopolies)rlm
bull Governments role is greater than in a free-market
economy but less than in a command economy
bull Most economies in the world today are mixed
economies
Questional Peperoni Pizza Questional Cheese Pizza
In a Mixed Economy the government regulates
what goes into the goods we purchase in order
to protect us
And you can buy your pizza wherever you want
tohellip
bull Traditional economies only make up a small part of
a countryrsquos economy
bull There are NO PURE Market economies in the world
bull There are NO PURE Command economies in the
world
ECOMICS UNIT
All economies in the world have aspects
of both command and market
ECOMICS UNIT
All modern economies in the world are MIXED economies
But the mix is different in every nation
ECOMICS UNIT
ECOMICS UNIT
bull USA Canada UK France etc etc
ECOMICS UNIT
bull Adjusts to change based on consumer wants
bull High degree of individual freedom
bull Low levels of government interference
bull Because individuals (with money) make the
decisions everyone (with money) has a voice in the
way the economy runs
bull Wide variety of available goods amp services
bull Many choices=high degree of consumer satisfaction
ECOMICS UNIT
bull Poverty only those with money can participate
bull Market does not provide for peoplersquos basic needs
Governments must attempt to do this (think
Katrina the tornado in Bridgeport etc)
bull High degree of uncertainty - people lose jobs
businesses fail
bull System at times puts profit before people
ECOMICS UNIT
In a pure market economy there is no government
involvement in economic decisions The government
lets the market answer the following three basic
economic questions
1 What Consumers decide what should
be produced in a market economy
through the purchases they make
ECOMICS UNIT
2 How Production is left entirely up to businesses
Businesses must be competitive in such an economy
and produce quality products at lower prices than
their competitors
3 For whom In a market economy the people who
have more money are able to buy more goods and
services
ECOMICS UNIT
ECOMICS UNIT
ldquoItrsquos Your money not the
governmentrsquosrdquo- President Ronald
Reagan
MARKETS
amp PRICES
FREEDOM OF
ENTERPRISE
amp CHOICE
PRIVATE
PROPERTY
ACTIVE BUT
LIMITED
GOVERNMENT
ROLE OF
SELF-INTEREST COMPETITION
ECOMICS UNIT
bull Are they truly Free Market Economies
bull Does the government regulate businesses
bull Does the government control any businesses
ECOMICS UNIT
Mixed economies combine both the private interests with the governmentrsquos interests Therersquos a balance to it bull Individuals and businesses make decisions for the
private sector
bull Government makes some decisions for the public
sector (ex regulation of monopolies)rlm
bull Governments role is greater than in a free-market
economy but less than in a command economy
bull Most economies in the world today are mixed
economies
Questional Peperoni Pizza Questional Cheese Pizza
In a Mixed Economy the government regulates
what goes into the goods we purchase in order
to protect us
And you can buy your pizza wherever you want
tohellip
bull Traditional economies only make up a small part of
a countryrsquos economy
bull There are NO PURE Market economies in the world
bull There are NO PURE Command economies in the
world
ECOMICS UNIT
All economies in the world have aspects
of both command and market
ECOMICS UNIT
All modern economies in the world are MIXED economies
But the mix is different in every nation
ECOMICS UNIT
ECOMICS UNIT
bull Adjusts to change based on consumer wants
bull High degree of individual freedom
bull Low levels of government interference
bull Because individuals (with money) make the
decisions everyone (with money) has a voice in the
way the economy runs
bull Wide variety of available goods amp services
bull Many choices=high degree of consumer satisfaction
ECOMICS UNIT
bull Poverty only those with money can participate
bull Market does not provide for peoplersquos basic needs
Governments must attempt to do this (think
Katrina the tornado in Bridgeport etc)
bull High degree of uncertainty - people lose jobs
businesses fail
bull System at times puts profit before people
ECOMICS UNIT
In a pure market economy there is no government
involvement in economic decisions The government
lets the market answer the following three basic
economic questions
1 What Consumers decide what should
be produced in a market economy
through the purchases they make
ECOMICS UNIT
2 How Production is left entirely up to businesses
Businesses must be competitive in such an economy
and produce quality products at lower prices than
their competitors
3 For whom In a market economy the people who
have more money are able to buy more goods and
services
ECOMICS UNIT
ECOMICS UNIT
ldquoItrsquos Your money not the
governmentrsquosrdquo- President Ronald
Reagan
MARKETS
amp PRICES
FREEDOM OF
ENTERPRISE
amp CHOICE
PRIVATE
PROPERTY
ACTIVE BUT
LIMITED
GOVERNMENT
ROLE OF
SELF-INTEREST COMPETITION
ECOMICS UNIT
bull Are they truly Free Market Economies
bull Does the government regulate businesses
bull Does the government control any businesses
ECOMICS UNIT
Mixed economies combine both the private interests with the governmentrsquos interests Therersquos a balance to it bull Individuals and businesses make decisions for the
private sector
bull Government makes some decisions for the public
sector (ex regulation of monopolies)rlm
bull Governments role is greater than in a free-market
economy but less than in a command economy
bull Most economies in the world today are mixed
economies
Questional Peperoni Pizza Questional Cheese Pizza
In a Mixed Economy the government regulates
what goes into the goods we purchase in order
to protect us
And you can buy your pizza wherever you want
tohellip
bull Traditional economies only make up a small part of
a countryrsquos economy
bull There are NO PURE Market economies in the world
bull There are NO PURE Command economies in the
world
ECOMICS UNIT
All economies in the world have aspects
of both command and market
ECOMICS UNIT
All modern economies in the world are MIXED economies
But the mix is different in every nation
ECOMICS UNIT
ECOMICS UNIT
bull Poverty only those with money can participate
bull Market does not provide for peoplersquos basic needs
Governments must attempt to do this (think
Katrina the tornado in Bridgeport etc)
bull High degree of uncertainty - people lose jobs
businesses fail
bull System at times puts profit before people
ECOMICS UNIT
In a pure market economy there is no government
involvement in economic decisions The government
lets the market answer the following three basic
economic questions
1 What Consumers decide what should
be produced in a market economy
through the purchases they make
ECOMICS UNIT
2 How Production is left entirely up to businesses
Businesses must be competitive in such an economy
and produce quality products at lower prices than
their competitors
3 For whom In a market economy the people who
have more money are able to buy more goods and
services
ECOMICS UNIT
ECOMICS UNIT
ldquoItrsquos Your money not the
governmentrsquosrdquo- President Ronald
Reagan
MARKETS
amp PRICES
FREEDOM OF
ENTERPRISE
amp CHOICE
PRIVATE
PROPERTY
ACTIVE BUT
LIMITED
GOVERNMENT
ROLE OF
SELF-INTEREST COMPETITION
ECOMICS UNIT
bull Are they truly Free Market Economies
bull Does the government regulate businesses
bull Does the government control any businesses
ECOMICS UNIT
Mixed economies combine both the private interests with the governmentrsquos interests Therersquos a balance to it bull Individuals and businesses make decisions for the
private sector
bull Government makes some decisions for the public
sector (ex regulation of monopolies)rlm
bull Governments role is greater than in a free-market
economy but less than in a command economy
bull Most economies in the world today are mixed
economies
Questional Peperoni Pizza Questional Cheese Pizza
In a Mixed Economy the government regulates
what goes into the goods we purchase in order
to protect us
And you can buy your pizza wherever you want
tohellip
bull Traditional economies only make up a small part of
a countryrsquos economy
bull There are NO PURE Market economies in the world
bull There are NO PURE Command economies in the
world
ECOMICS UNIT
All economies in the world have aspects
of both command and market
ECOMICS UNIT
All modern economies in the world are MIXED economies
But the mix is different in every nation
ECOMICS UNIT
ECOMICS UNIT
In a pure market economy there is no government
involvement in economic decisions The government
lets the market answer the following three basic
economic questions
1 What Consumers decide what should
be produced in a market economy
through the purchases they make
ECOMICS UNIT
2 How Production is left entirely up to businesses
Businesses must be competitive in such an economy
and produce quality products at lower prices than
their competitors
3 For whom In a market economy the people who
have more money are able to buy more goods and
services
ECOMICS UNIT
ECOMICS UNIT
ldquoItrsquos Your money not the
governmentrsquosrdquo- President Ronald
Reagan
MARKETS
amp PRICES
FREEDOM OF
ENTERPRISE
amp CHOICE
PRIVATE
PROPERTY
ACTIVE BUT
LIMITED
GOVERNMENT
ROLE OF
SELF-INTEREST COMPETITION
ECOMICS UNIT
bull Are they truly Free Market Economies
bull Does the government regulate businesses
bull Does the government control any businesses
ECOMICS UNIT
Mixed economies combine both the private interests with the governmentrsquos interests Therersquos a balance to it bull Individuals and businesses make decisions for the
private sector
bull Government makes some decisions for the public
sector (ex regulation of monopolies)rlm
bull Governments role is greater than in a free-market
economy but less than in a command economy
bull Most economies in the world today are mixed
economies
Questional Peperoni Pizza Questional Cheese Pizza
In a Mixed Economy the government regulates
what goes into the goods we purchase in order
to protect us
And you can buy your pizza wherever you want
tohellip
bull Traditional economies only make up a small part of
a countryrsquos economy
bull There are NO PURE Market economies in the world
bull There are NO PURE Command economies in the
world
ECOMICS UNIT
All economies in the world have aspects
of both command and market
ECOMICS UNIT
All modern economies in the world are MIXED economies
But the mix is different in every nation
ECOMICS UNIT
ECOMICS UNIT
2 How Production is left entirely up to businesses
Businesses must be competitive in such an economy
and produce quality products at lower prices than
their competitors
3 For whom In a market economy the people who
have more money are able to buy more goods and
services
ECOMICS UNIT
ECOMICS UNIT
ldquoItrsquos Your money not the
governmentrsquosrdquo- President Ronald
Reagan
MARKETS
amp PRICES
FREEDOM OF
ENTERPRISE
amp CHOICE
PRIVATE
PROPERTY
ACTIVE BUT
LIMITED
GOVERNMENT
ROLE OF
SELF-INTEREST COMPETITION
ECOMICS UNIT
bull Are they truly Free Market Economies
bull Does the government regulate businesses
bull Does the government control any businesses
ECOMICS UNIT
Mixed economies combine both the private interests with the governmentrsquos interests Therersquos a balance to it bull Individuals and businesses make decisions for the
private sector
bull Government makes some decisions for the public
sector (ex regulation of monopolies)rlm
bull Governments role is greater than in a free-market
economy but less than in a command economy
bull Most economies in the world today are mixed
economies
Questional Peperoni Pizza Questional Cheese Pizza
In a Mixed Economy the government regulates
what goes into the goods we purchase in order
to protect us
And you can buy your pizza wherever you want
tohellip
bull Traditional economies only make up a small part of
a countryrsquos economy
bull There are NO PURE Market economies in the world
bull There are NO PURE Command economies in the
world
ECOMICS UNIT
All economies in the world have aspects
of both command and market
ECOMICS UNIT
All modern economies in the world are MIXED economies
But the mix is different in every nation
ECOMICS UNIT
ECOMICS UNIT
ECOMICS UNIT
ldquoItrsquos Your money not the
governmentrsquosrdquo- President Ronald
Reagan
MARKETS
amp PRICES
FREEDOM OF
ENTERPRISE
amp CHOICE
PRIVATE
PROPERTY
ACTIVE BUT
LIMITED
GOVERNMENT
ROLE OF
SELF-INTEREST COMPETITION
ECOMICS UNIT
bull Are they truly Free Market Economies
bull Does the government regulate businesses
bull Does the government control any businesses
ECOMICS UNIT
Mixed economies combine both the private interests with the governmentrsquos interests Therersquos a balance to it bull Individuals and businesses make decisions for the
private sector
bull Government makes some decisions for the public
sector (ex regulation of monopolies)rlm
bull Governments role is greater than in a free-market
economy but less than in a command economy
bull Most economies in the world today are mixed
economies
Questional Peperoni Pizza Questional Cheese Pizza
In a Mixed Economy the government regulates
what goes into the goods we purchase in order
to protect us
And you can buy your pizza wherever you want
tohellip
bull Traditional economies only make up a small part of
a countryrsquos economy
bull There are NO PURE Market economies in the world
bull There are NO PURE Command economies in the
world
ECOMICS UNIT
All economies in the world have aspects
of both command and market
ECOMICS UNIT
All modern economies in the world are MIXED economies
But the mix is different in every nation
ECOMICS UNIT
ECOMICS UNIT
ldquoItrsquos Your money not the
governmentrsquosrdquo- President Ronald
Reagan
MARKETS
amp PRICES
FREEDOM OF
ENTERPRISE
amp CHOICE
PRIVATE
PROPERTY
ACTIVE BUT
LIMITED
GOVERNMENT
ROLE OF
SELF-INTEREST COMPETITION
ECOMICS UNIT
bull Are they truly Free Market Economies
bull Does the government regulate businesses
bull Does the government control any businesses
ECOMICS UNIT
Mixed economies combine both the private interests with the governmentrsquos interests Therersquos a balance to it bull Individuals and businesses make decisions for the
private sector
bull Government makes some decisions for the public
sector (ex regulation of monopolies)rlm
bull Governments role is greater than in a free-market
economy but less than in a command economy
bull Most economies in the world today are mixed
economies
Questional Peperoni Pizza Questional Cheese Pizza
In a Mixed Economy the government regulates
what goes into the goods we purchase in order
to protect us
And you can buy your pizza wherever you want
tohellip
bull Traditional economies only make up a small part of
a countryrsquos economy
bull There are NO PURE Market economies in the world
bull There are NO PURE Command economies in the
world
ECOMICS UNIT
All economies in the world have aspects
of both command and market
ECOMICS UNIT
All modern economies in the world are MIXED economies
But the mix is different in every nation
ECOMICS UNIT
MARKETS
amp PRICES
FREEDOM OF
ENTERPRISE
amp CHOICE
PRIVATE
PROPERTY
ACTIVE BUT
LIMITED
GOVERNMENT
ROLE OF
SELF-INTEREST COMPETITION
ECOMICS UNIT
bull Are they truly Free Market Economies
bull Does the government regulate businesses
bull Does the government control any businesses
ECOMICS UNIT
Mixed economies combine both the private interests with the governmentrsquos interests Therersquos a balance to it bull Individuals and businesses make decisions for the
private sector
bull Government makes some decisions for the public
sector (ex regulation of monopolies)rlm
bull Governments role is greater than in a free-market
economy but less than in a command economy
bull Most economies in the world today are mixed
economies
Questional Peperoni Pizza Questional Cheese Pizza
In a Mixed Economy the government regulates
what goes into the goods we purchase in order
to protect us
And you can buy your pizza wherever you want
tohellip
bull Traditional economies only make up a small part of
a countryrsquos economy
bull There are NO PURE Market economies in the world
bull There are NO PURE Command economies in the
world
ECOMICS UNIT
All economies in the world have aspects
of both command and market
ECOMICS UNIT
All modern economies in the world are MIXED economies
But the mix is different in every nation
ECOMICS UNIT
ECOMICS UNIT
bull Are they truly Free Market Economies
bull Does the government regulate businesses
bull Does the government control any businesses
ECOMICS UNIT
Mixed economies combine both the private interests with the governmentrsquos interests Therersquos a balance to it bull Individuals and businesses make decisions for the
private sector
bull Government makes some decisions for the public
sector (ex regulation of monopolies)rlm
bull Governments role is greater than in a free-market
economy but less than in a command economy
bull Most economies in the world today are mixed
economies
Questional Peperoni Pizza Questional Cheese Pizza
In a Mixed Economy the government regulates
what goes into the goods we purchase in order
to protect us
And you can buy your pizza wherever you want
tohellip
bull Traditional economies only make up a small part of
a countryrsquos economy
bull There are NO PURE Market economies in the world
bull There are NO PURE Command economies in the
world
ECOMICS UNIT
All economies in the world have aspects
of both command and market
ECOMICS UNIT
All modern economies in the world are MIXED economies
But the mix is different in every nation
ECOMICS UNIT
ECOMICS UNIT
Mixed economies combine both the private interests with the governmentrsquos interests Therersquos a balance to it bull Individuals and businesses make decisions for the
private sector
bull Government makes some decisions for the public
sector (ex regulation of monopolies)rlm
bull Governments role is greater than in a free-market
economy but less than in a command economy
bull Most economies in the world today are mixed
economies
Questional Peperoni Pizza Questional Cheese Pizza
In a Mixed Economy the government regulates
what goes into the goods we purchase in order
to protect us
And you can buy your pizza wherever you want
tohellip
bull Traditional economies only make up a small part of
a countryrsquos economy
bull There are NO PURE Market economies in the world
bull There are NO PURE Command economies in the
world
ECOMICS UNIT
All economies in the world have aspects
of both command and market
ECOMICS UNIT
All modern economies in the world are MIXED economies
But the mix is different in every nation
ECOMICS UNIT
Questional Peperoni Pizza Questional Cheese Pizza
In a Mixed Economy the government regulates
what goes into the goods we purchase in order
to protect us
And you can buy your pizza wherever you want
tohellip
bull Traditional economies only make up a small part of
a countryrsquos economy
bull There are NO PURE Market economies in the world
bull There are NO PURE Command economies in the
world
ECOMICS UNIT
All economies in the world have aspects
of both command and market
ECOMICS UNIT
All modern economies in the world are MIXED economies
But the mix is different in every nation
ECOMICS UNIT
And you can buy your pizza wherever you want
tohellip
bull Traditional economies only make up a small part of
a countryrsquos economy
bull There are NO PURE Market economies in the world
bull There are NO PURE Command economies in the
world
ECOMICS UNIT
All economies in the world have aspects
of both command and market
ECOMICS UNIT
All modern economies in the world are MIXED economies
But the mix is different in every nation
ECOMICS UNIT
bull Traditional economies only make up a small part of
a countryrsquos economy
bull There are NO PURE Market economies in the world
bull There are NO PURE Command economies in the
world
ECOMICS UNIT
All economies in the world have aspects
of both command and market
ECOMICS UNIT
All modern economies in the world are MIXED economies
But the mix is different in every nation
ECOMICS UNIT
ECOMICS UNIT
All modern economies in the world are MIXED economies
But the mix is different in every nation
ECOMICS UNIT
ECOMICS UNIT
