Unit 2, Activity 6, Four Basic Economic Questions

Four Basic Economic Questions

Government controls the Producers are directed to
Command System factors of production and make and deliver goods
use. and services.

Economic decisions are Resources are allocated

Traditional System based on customs, by inheritance –
beliefs, and norms. subsistence farming.

Individuals own the Supply and demand –

Market System factors of production and consumers and businesses
make their own economic decide on what to produce
decisions. and purchase.

Command Market Traditional

1. What to produce?

2. How to produce it?

3. How much to produce?

4. Who gets what is produced?

Unit 2, Activity 6, Economic Systems

Economic Systems
Term Definition Application Which exists in the
United States and
Louisiana?

Traditional
Economic System

Command
Economic System

Market Economic
System
Unit 2, Activity 6, Economic Systems

Advantages/Disadvantages of Each Economic System

Advantages Disadvantages

Command System

Traditional System

Market System