Economic Systems - Bethel Social Studies

Economic Systems

Chapter 2: Economic Systems

KEY CONCEPT An economic system is the way in which a

society uses its resources to satisfy its people's unlimited wants. WHY THE CONCEPT MATTERS An economic system determines what to produce, how to produce, and for whom to produce. Countries have mixed systems, but some systems give more economic and political freedom and create more wealth than others.

Introduction to Economic Systems

Types of Economic Systems

KEY CONCEPTS

Economic system--how society uses resources to satisfy people's wants

Three basic systems: traditional, command, and market economies

Mixed economies have features of more than one type of system

Types of Economic Systems

TYPE 1: Traditional Economy

Traditional economy centers on families, clans, or tribes decisions are based on customs and beliefs

Everyone has a set role; no chance of deviating from pattern

Good of the group always comes before individual desires

Types of Economic Systems

TYPE 2: Command Economy Command economy--government makes

economic decisions determines what to produce; how to

produce; who gets products Wants of individual consumers rarely

considered Government owns means of production:

resources and factories

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