Economic Systems

Front

What is an economic system?

Back

The way in which a society organizes for the production and distribution of goods and services to meet the needs of the people.

Front

What are the three issues that scarcity forces society to consider?

Back

1. What to produce with the available supply of resources? 2. How to produce these products? 3. Who should benefit from the production of these goods and services?

Front

What are the four main types of economic systems?

Back

1. Subsistence Economy 2. Free market/Capitalist Economy 3. Planned/Command Economy 4. Mixed Economy

Front

Describe a subsistence economy.

Back

Humans produce just enough to survive but not to improve their way of life.

Front

In a subsistence economy, who decides what to produce?

Back

The individual, based on their needs.

Front

What are the advantages of a subsistence economy?

Back

Utilizes natural resources to meet needs.

Front

What are the disadvantages of a subsistence economy?

Back

Limited choice of goods available; individuals could not produce everything to satisfy their needs.

Front

What is a planned economy?

Back

An economy owned and controlled by the government, which decides how resources are allocated.

Front

What are the advantages of a planned economy?

Back

Basic needs of society are met; provision of public goods.

Front

What are the disadvantages of a planned economy?

Back

Lack of consumer choice; low quality products due to no competition; creativity and efficiency are not encouraged.