The document discusses the three main types of economic systems: command economies, market economies, and mixed economies. It notes the key characteristics of each system. Command economies have centralized government control of production and consumption, with pros like low unemployment but cons like lack of consumer choice. Market economies rely on voluntary exchange and private ownership, with pros like growth incentives but cons like wealth inequality. Mixed economies combine elements of both with government intervention in certain areas like regulations, taxes, and public services.

1. Economic
Systems

2. The Three Key Economic
Questions1.
1. What goods and services should be
produced?
2. How should goods and services be
produced?
3. Who consumes goods and services?

3. Command Economy (Centrally Planned)
PROS
• Low unemployment.
• Less class distinction.
• Basic needs are met.
CONS
• Government owns the
factors of production.
• Little consumer choice.
• Quantity not quality.
• No incentive for the
workers.
• Sacrifice individual
freedoms.

4. What does this photo say about a command economy?

6. Incentives: an expectation that encourages people
to behave a certain way.
List two incentives in your life.
1.
2.

7. Market Economy (Free
Market)
PROS
• Individuals own factors
of production.
• Voluntary exchange.
• Encourages growth and
specialization.
• Incentive/competition-
profit.
CONS
• Large gap in the distribution
of wealth.
• Booms and busts in the
economy.
• Does not provide for things
the market does not address.
• Ex. National Defense,
Police, School, Parks.
The Invisible Hand

9. Mixed Economy
PROS
• Government regulations
= consumer protection.
FDA
• Property rights, patents
• Taxes: provide social
benefits.
• National Defense,
Police, Schools, Parks.
• Taxes: “Safety net” for
those who cannot provide
for themselves.
CONS
• Too much regulation
inhibits growth.
• Encourage social
dependency on
government programs.
• When, where, and what
extent should government
step in.

10. Championship Rock, Paper,
Scissors…..Lets see the economic
systems in action!

11. Time for a play
What if ……………………..
I love
command
economies!
I love free
market
economies!

13. Checking For Understanding
(Command, Market, or Mixed)
• The regulations government provide
can be looked at as a positive because
they can protect the consumer.
Mixed

14. • There is little consumer choice.
Command

15. • Quantity not quality.
Command

16. • Too much regulation might inhibit
growth.
Mixed

17. • The individual owns the factors of
production.
Market

18. • Sacrifice individual
freedoms.
Command

19. • Things not provided in the market are
not addressed.
Market

20. • The rich can get richer.
Market

21. • One might work harder while the
other who slacks off gets the same
pay.
Command

22. • Your tax money allows for the
building of things not addressed in the
market.
Mixed

23. The Invisible Hand: Self-interest and competition work together
to regulate the marketplace. Adam Smith, The Wealth of
Nations 1776
* In a sales transaction, buyers and sellers consider only their
self-interest, which is the motivating force behind the free
market.
Buyers
Incentive
Sellers
“Get a good deal” “Make Profit”
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