PRESENTATION Types of Economic Systems

Types of Economic Systems

Mr. Paluch

Learning Objectives What will I be learning today?	Success Criteria I know I am successful  when   . . .	​ Relevance This is important to know because . . .
​Content:  I will be learning about the different types of economies in the world. ​Language Objective: I will be learning how to gather information from oral presentations and informational texts.	​ ⬜ I can list characteristics, advantages, disadvantages, and examples of the various types of economic systems. ⬜ I can support my argument by citing information from the text.	​This is relevant to me because I need to learn to research topics of interest and learn on my own.
​	​	​

Ohio Standards: Economics

4. Different economic systems (traditional, market, command, and mixed) utilize different methods to allocate limited resources.

8. Economic policy decisions made by governments result in both intended and unintended consequences.

Before we begin, Please answer a few pre-assessment questions to help me determine your current understanding.

Multiple Choice

What is the best definition for the word ECONOMY?

• Meeting place or mechanism that allows buyers and sellers to come together

• Organized way in which society provides for the wants and needs of its people

Multiple Choice

In a ___________ economic system, customs and traditions determine what and how to produce

• mixed

• traditional

• market

• command

Multiple Choice

In a _____________ economic system, the government owns resources and controls production, prices, and wages

• Command

• Traditional

• Market

• Mixed

Multiple Choice

What is a free market economy?

• An economy based on supply and demand with little or no government control

• The international exchange of goods

• An economy in which decisions are made by the government

• An economy that is communist

Dropdown

What type of economy does the United States have?​ ​

Select answer

Dropdown

Which type of economy involves trading, and doesn't usually use money?​

Select answer

Multiple Choice

In a ________ economy, the government makes all of the major economic decisions.

• Mixed

• Market

• Command

• Traditional

Types of Economic Systems

A traditional economy is an economic system that is based on customs, beliefs, and traditions that have been passed down from generation to generation. In a traditional economy, the economic activities of a community are centered around subsistence farming, hunting, and gathering, and there is little specialization of labor or use of modern technology.

Traditional Economy

Characteristics

Traditional Economy

​Strong social relationships and community ties. Little use of modern technology. Little to no division of labor or specialization. Subsistence farming, hunting, and gathering as the primary economic activities. Bartering and trading as the main form of exchange.

1. Limited opportunities for economic growth and development.

2. Limited access to modern technology and education.

3. Vulnerability to natural disasters and economic shocks.

4. Limited social mobility and opportunities for individuals to improve their standard of living.

Disadvantages

1. Strong social relationships and community ties.

2. Sustainable use of natural resources.

3. Self-sufficiency and independence.

Advantages

Traditional Economy

​​The Maasai tribe of Kenya and Tanzania.

The Inuit of Canada and Alaska.

The Amish community in the United States.

​Examples of Traditional Economies

A command economy is an economic system in which the government makes all the economic decisions and controls all the factors of production. In a command economy, the government sets production targets, decides what goods and services will be produced, and determines the prices of goods and services.

​

Command Economy

Characteristics

Command Economy

​A centralized government has control over the economy. State ownership of land and capital. Government-planned production targets and quotas. Limited individual economic freedom. Price controls and subsidies. Limited market competition.

1. Limited incentives for innovation and efficiency.

2. Bureaucratic inefficiencies and corruption.

3. Poor quality of goods and services.

4. Limited consumer choice and access to new technology.

5. Lack of market competition and pricing efficiency.

6. Overproduction or underproduction of goods and services, leading to shortages or surpluses.

Disadvantages

1. Rapid industrialization and economic growth.

2. Equal distribution of wealth and resources.

3. Government can prioritize the production of goods and services that benefit society as a whole.

4. Greater social welfare programs.

Advantages

Command Economy

North Korea

Cuba

Former Soviet Union

​Examples of Command Economies

A market economy is an economic system in which the production, distribution, and pricing of goods and services are determined by the interactions of buyers and sellers in the market. In a market economy, the role of the government is limited to enforcing property rights, contracts, and regulations to ensure fair competition.

​

Market Economy

Characteristics

Market Economy

A Market Economy is characterized by a great deal of freedom. People can spend their money on the things that they want. When individuals purchase something, it is similar to voting. These "votes" let the producer know what to make more of.

-Companies are also free to find the best production methods.

-Private ownership of materials and the factors of production is allowed.

1. Market failures such as externalities, public goods, and information asymmetry.

2. Income inequality and unequal distribution of wealth.

3. Lack of social welfare programs and safety nets.

4. Exploitation of workers and natural resources.

5. Economic instability and market volatility.

6. Short-term focus and neglect of long-term societal interests.

Disadvantages

1. Efficient allocation of resources based on market demand.

2. Greater individual economic freedom and choice.

3. Incentives for innovation, efficiency, and entrepreneurship.

4. Greater consumer choice and access to new technology.

5. Higher standard of living.

Advantages

Market Economy

Examples of Market Economies

United Kingdom

United States

Japan

Germany

Mixed Economies

Definition for Mixed Economy: Economic system that has some combination of traditional, command, and market.

Characteristics

*Some mixed economies have governments based on democratic value, but others do no.

*The level of government involvement in the mixed economy can change based on country.

The more services provided by a country can result in citizens paying more money (Example: Germany has a lot of beneficial programs, but the people there pay high taxes).

Socialism countries suffer from the following:

1) Deterioration of service over time.

-It's free, but not the best

2)Less efficient than capitalism

Disadvantages

*Mixed economies provide assistance for some people.

*People can and have an impact of government's role in the economy.

*Under socialism, those who cannot take care of themselves will be cared for. Examples:

*Public housing

* Free medical care and education

Advantages:

Advantages and Disadvantages

China has a mixture of traditional, cammand, and market economies. Government makes many of the important economic decisions. Taditional markets still have strong influence in rural areas. China is allowing for more private ownership.

China

The petroleum industry is controled by the government. Government also provides education, roads, social welfare, and cheap gas to citizens. Government still uses capitalism in other areas of their economy.

Norway