economies!

economies!

Market Economy

• People have control

• What to produce, how to produce, and for whom to produce is decided by Supply and Demand

• What people want, factories will produce

• Depending on how many people want something, the product can be expensive or cheap

Multiple Choice

How do market economies answer the three basic economic questions?

• The government will decide

• The past will guide producers

• Supply and demand will guide producers and all decisions

• Supply and demand will guide producers, but the government will intervene

Command Economy

• The government controls everything

• What to produce, how to produce, and for whom to produce is decided by the government

Multiple Choice

How do command economies answer the three basic economic questions?

• The government will make all decisions.

• The past will guide all decisions.

• Supply and demand will guide all decisions.

• The government will intervene to ensure fairness and productivity.

Mixed Economy

• A mix of command and market

• Somewhere in between command economy and market economy on the economic continuum

• What to produce, how to produce, and for whom to produce are decided by Supply and Demand

Multiple Choice

How do mixed economies answer the three basic economic questions?

• The government will make all decisions.

• The past will guide all decisions.

• Supply and demand will guide all decisions.

• Supply and demand will guide producers, but the government will intervene to ensure fairness and productivity.

Market Economy

• Workers have different incentives

• Example: if they work hard and save money, they can own land, go on vacations, buy a house, etc.

Multiple Choice

What gives people an incentive to work and save in a market economy?

• the desire for immediate satisfaction

• the ability to own private property

• the law of supply and demand

• the government’s regulations