Three Essential Questions of Production ~ Economic Understandings SS7E5a Name_______________________________________Date__________________________________ Class 1 2 3 4 Traditional Economies Command Economies Market Economies Mixed Economies What is In this type of In a command economy, the In a market economy, the Nearly all economies in produced? economic system, what central government decides wants of the consumers and the world today have is produced is based on what goods and services will the profit motive of the characteristics of both custom and the habit be produced, what wages will producers will decide what market and command of how such decisions be paid to workers, what will be produced. A.K.A. economic systems. were made in the past. jobs the workers do, as well Free-enterprise, Laisse- as the prices of goods. faire & capitalism. This means that most How is it The methods of In a command economy, no Labor (the workers) and countries have produced? production are one can start their own management (the characteristics of a primitive. Bartering, or business. bosses/owners) together free market/free a system of trading in The government determines will determine how goods enterprise as well as goods and services, how and where the goods will be produced in a market some government replaces currency in a produced would be sold. economy. planning and control. traditional economy. For whom is The primary group for In a command economy, the In a market economy, each it produced? whom goods and government determines how production resource is paid services are produced the goods and services are based on what is in a traditional economy distributed. contributed to the is the tribe or family production of goods and group. services. 1 Definition: An economic system is a collection of formal and informal institutions, laws, systems of beliefs, and values which provide a framework for collective decision making. Notes: __________________________________________________________________________________________________ __________________________________________________________________________________________________ __________________________________________________________________________________________________ __________________________________________________________________________________________________ __________________________________________________________________________________________________ __________________________________________________________________________________________________ __________________________________________________________________________________________________ __________________________________________________________________________________________________ __________________________________________________________________________________________________ __________________________________________________________________________________________________ __________________________________________________________________________________________________ __________________________________________________________________________________________________ __________________________________________________________________________________________________ 2.