Fish Sticks!!! Wait what?
Will Get to the fish sticks later…
Yesterday we looked at different economic
systems. Lets discuss the question from
What system is the best? Explain. Think about
the basic goal of economics, such as growth,
efficiency, stability, and equity?
In what ways does economics impact your
Terms to Know
Economy: It is a system in which people make,
exchange, and use things that have value and that
meet their wants and needs.
Producer: Owners and workers in the economy
Consumer: People who buy and use products
Every Economic System has 3 Decisions it has to make:
1. What and how many goods and services should be
2. How they should be produced?
3. Who gets these completed products?
These Decisions Vary based on the Economic
System you choose
Three types of economic systems
Traditional Economy: habit and custom determine
the rules for all economic activity.
Individuals don’t make decisions on what they would
like to have. Instead follow customs and behaviors
of their elders.
Exist in a very limited part of the world today.
Market Economy (Private Ownership)
Market Economy: Also called Capitalism,
individuals and private groups make decisions
about what to produce.
Based on Free Enterprise, the idea that private
individuals have a right to own property and
businesses with little government involvement.
People can choose who they work for and what job
they want to follow for a career.
Market Economy cont.
No country on Earth has a perfect market system.
Mixed Economy- government supports Free
Enterprise, but also has a say in it to protect the
citizens of that government from possible economic
Example of Mixed Economy
Socialism: 3 main goals.
1.Provide equitable distribution of wealth and economic
2. Society control through government.
3. Public ownership of services and factories that are
Last type…Command Economy
Command Economy: Often associated
with Communism, the government owns or
directs the means of production – land
and labor , and business managers
– controls the distribution of goods.
Example: Communist China
What are the differences between a Market
Economy and a Command Economy?
Not only economic systems…..
Not only are the economic systems important, but also what type of
jobs is available in the country you live in. There are four types of
jobs: Primary, Secondary, Tertiary, and Quaternary.
Lets name some jobs and see if you can determine what the
definition of each Economic Activity.
Primary Economic Activities: taking and using
natural resources directly from the earth.
Examples: farming, coal mining, and fishing
Secondary Economic Activities: use raw materials to
produce something new and more valuable.
Examples: manufacturing cars, making pottery and
Tertiary Activates: Do not involve directly acquiring
and remaking natural resources. Instead, they are
activates that provide services to people and
i.e. doctors, bankers, teachers, lawyers, food servers
Quaternary Activities: concerned with processing,
management, and distribution of information.
i.e professionals in education, business, and research
Why do we trade?
There are two types of countries that exist in the
world today. Developed and Developing Countries.
Developed Nations: Nations with more advanced
industry and technology. 1/5 of the worlds people live
in Developed Nations (USA, Canada, Japan, most
European Nations). Most live in cities and work in jobs
on the higher end of the Economic system ( tertiary jobs
or secondary jobs) . Many citizens will work in service
jobs, while machines work on manufacturing jobs.
Developing Nations: Nations with fewer industries and
technology. See this how many African, Asian, and
These countries do not do as many high tech and complex
jobs ( do Primary and Secondary jobs)
Usually the jobs are low paying and many of the citizens the
people will focus on individual farming to support their
So what do we trade
Natural Resources: useful material found in the
Renewable Resources: Resources that can be replaced
(water, the sun, trees?)
Non-Renewable Resources: a resource that cannot be
replaced (Fossil Fuels include oil, natural gas, coal, etc.)
What do we exchange? Why do
we do exchanging?
Countries rely on each other to survive in this world
Every country has an item that other countries want,
USA specializes in making computers and Saudi Arabia
specializes in producing oil. USA needs oil and the
Saudi’s need computers. So we trade to get the items
that we need to survive.
We trade to get the items we need that we cannot have
or produce in our own countries.