ECONOMIC THE FOUR MAIN

SYSTEMS ECONOMIC SYSTEMS

 ECONOMIC
SYSTEM
The way a country organizes and
uses its resources to meet the needs
and wants of its people.
TRADITIONAL ECONOMY

Aka Subsistence Economy

In this system only enough goods and services are

produced to satisfy their own needs and wants. Direct
production used. Old age customs are followed.

Example – Some parts of Africa and Asia.

 MARKET
ECONOMY

Aka Capitalist, Free

Market, Free Enterprise
or Laissez Faire.

Main feature is the

interaction between
supply and demand

Example the USA

 AKA Command or
Centralized
PLANNE
Main feature is that the
D government makes all
ECONO of the decisions
MY
Example CUBA
MIXED
ECONOMY
Mixture of features of both a
market economy and a command
economy. Private Sector and
Public Sector.
COMPLETE THE
ACTIVITY BELOW
https://www.liveworksheets.com/in13142
99sc
 1.Explain why government
exercise control over the
economy

2 . Explain the following

OBJECTI terms: lassiez faire, open
VES market, capitalism, Free
enterprise"

3. Differentiate between merit

goods and services, public
goods and services and free
goods.
 Imagine a world full of the
following:

GOVERN Inequalities, Instability,

MENT Dominant firms, Welfare
INTERVE and Social costs and
NTION benefits.
Government tries to make it
better for all of its citizens,
so they exercise control.
KEY VOCABULARY
Lassiez faire
In economics, laissez-faire
describes an environment in
which transactions between
private parties are free from state
intervention, including
restrictive regulations, taxes,
tariffs and enforced monopolies.
Open Market
A general sense used in
economics and political
economy, an open market refers
to a market which is accessible
to all economic actors. In an
open market so defined, all
economic actors have an equal
opportunity of entry in that
market.
KEY VOCABULARY

Capitalism
Free enterprise
An economic system in which the An economic system that
means of production are privately provides individuals the
owned and operated for profit; opportunity to make their own
supply, demand, price, distribution, economic decisions, free of
and investments are determined government constraints, and as
mainly by private decisions in the private profit-potential
free market, rather than by the state
through central economic planning;
businesses.
Profit is distributed to owners who
invest in businesses, and wages are
paid to workers employed by
businesses
 Free good - The free good is a term used in
KEY economics to describe a good that is not
scarce. A free good is available in as great a
VOCAB quantity as desired with zero opportunity
cost to society.
ULARY
MERIT GOODS
Goods and services which a government considers are important to
the welfare of the community, but which may not be adequately
provided through the price system.
PRIVATE GOODS
All goods and services provided through the market mechanism,
whether by the government or by private firms.
PUBLIC GOOD
This term refers to goods and services which would not be supplied
in a market economy because it is not possible to charge a person for
the amounts he or she consumes.
 Street lighting
EXAMPL
Services provided
ES OF Police
PUBLIC force/Defense
GOODS
Roads
QUESTIONS
1. In your own words, what are the following?
merit goods
Services
public goods
Services
free goods
2. What is the difference between an input and an output?
3. Explain any TWO of the following terms: lassiez faire, open
market, capitalism, Free enterprise. In your own words.