CE.9b

Economic Systems

CE.9b

The type of economy is determined by…

CE.9b

…the extent of government involvement in economic decision

making.

CE.9b

Characteristics of a free market economy

• Private Ownership of property/resources

• Individual Choice (Profit motive)

• Supply and Demand determines price

• Other

– Competition

– Consumer Sovereignty

CE.9b

Private Ownership of Property/Resources

• You the consumer have the right to own your own property and resources

What do you think this means?

CE.9b

Private Ownership of Property/Resources

• Billy Bob owns his own restaurant, while Mickey owns his own ice cream shop

• Both are privately owned businesses

CE.9b

Private Ownership of Property/Resources

• Many of your parent’s own their own homes in Prince William County

• Some of your relatives may own their own vehicle, but more and more people today lease their cars

CE.9b

Drawing Time!

• Draw your own picture of something that reminds you of a free market economy

CE.9b

Free Market Economies

• No purely Free Market Economies actually exist in the world. It is only a theory!

CE.9b

Free Market Economies

• Citizens own everything in a free market economy

• The government owns nothing

CE.9b

Government Control

CE.9b

A command economy is the opposite of a…

CE.9b

…free market economy!

CE.9b

Government Control

CE.9b

Characteristics of a command economy

• Central (government) Ownership of property/resources

• No Individual Choice

• Central Planning determines price and production

• Other

CE.9b

Command Economy

We the Government control the economy!

Not you, the citizens, like in a free market!

CE.9b

Command Economy!The ECONOMY is MINE!

Muaaaah hahahahahahhha

Muahhhhhhahahahahah

CE.9b

Command Economy

• The Government owns property and all resources

• This is called being “centrally owned”

CE.9b

Command Economy

• People work in the government to plan and control the economy

• The government decides on how much of everything will be produced and consumed

• NO consumer sovereignty

CE.9b

Command Economy

• There is no individual choice

• Everyone gets the same

• Most command economies in the world are Communist countries

CE.9b

Command Economies Today

CE.9b

Drawing Time!

• Draw your own picture of something that reminds you of a command economy

CE.9b

A mixed economy is a blend of a free market economy…

CE.9b

…and a command economy

CE.9b

Characteristics of a mixed economy

• Private and Public ownership of property/resources (2 sectors)

• Individual Choice in private sector

• Supply and Demand usually determines price and production– Gov't controls some prices and production

(energy, food, roads, etc.)

CE.9b

Government Control

CE.9b

Mixed Economy

• Private sector is the area in which the individuals own things

• Cars• House• Own Businesses• Property

CE.9b

Mixed Economy

• People can purchase what they want

• People have many choices

• Variety of brands and products

• Tons of stores

CE.9b

Mixed Economy

• The government owns many things in the public sector

• Buildings• Mass transportation

services• Major construction

projects

CE.9b

Mixed Economy

• Government plays a role in the economy

• Tax cuts• Stimulus plans• Spending proposals• Federal/State budgets• Income Taxes• Property Taxes

CE.9b

Mixed Economies

CE.9b

Drawing Time!

• Draw your own picture of something that reminds you of a mixed economy

Exit Slip

• In 4-5 Sentences, complete one of the following options:– Journal Entry (what would a typical day be

like for someone living in a command economy?)

– One Word Summary (select any one of the economic systems

– Persuasive Paragraph (which system is best and why)