B. Economic Systems

I. Southwest Asia (Middle East)‎ > ‎4. Economics in Southwest Asia‎ > ‎

The 3 Basic Economic Systems:

There are 3 basic economic systems. Those systems are traditional, command, and market. These economies all have their ups and downs.

Below are some 'depictions' and charts of these 3 economies.

	Command
Definition	. Government decides the answers to the three economic questions.
What to produce	Whatever the government decides is the most needed.
How to produce	Sometimes least cost method- government decides.
Motivation to produce	Limited social gain.
Choice of Jobs	Government directed.
Progress and Technology: Is it stressed	. To some degree.
Base values	Moral rewards, social gain, and governmental degree.

	Traditional
Definition	Culture (Social roles) decides the answers to the three economic questions.
What to produce	Whatever is traditionally produced there.
How to produce	Traditional ways- how your ancestors did it.
Motivation to produce	Traditional incentives- Is expected of you.
Choice of Jobs	Custom directed.
Progress and Technology: Is it stressed	No- Not at all.
Base values	Customs/ traditional ways and beliefs.

	Market
Definition	People decide the answers to the three economic questions.
What to produce	Whatever is the most profitable.
How to produce	The least cost method.
Motivation to produce	More money- Self gain.
Choice of Jobs	Individual preference.
Progress and Technology: Is it stressed	Yes- Better capital resources helps you produce goods faster.
Base values	Competition, material rewards, self-gain, and freedom.

Mixed Economies:

There is 1 special type of economy with all those others: the mixed economy. It is a combination of market and command economy. This is so efficient EVERY country in the world uses it!

How is it that there is no pure market or pure command but only mixed economies? That is because you either have some freedom or some government control. For example, a government controls most of your country, but you can still choose what to eat or where to live or to have a family or to choose who you marry. Those are some reasons that you can still have the power to choose some things. Also if you think you live in a pure market economy but the government might still make decision like to put serial numbers on fire arms or your culture or your traditions. So you really are not living in a pure market or pure command because you or the government has some control. That is how there is only one kind of economy in this day and age.

This is an example of a mixed economy. There is government intervention inside a probably private company.

Quick Summary:

There are 3 basic economies: market, command, and traditional. They all have their ups and downs.
There is 1 special economy: mixed.
EVERY country uses it in the world.

Written by

Team Kobra
Erwin

Grace

Max

Tyler

Sources:
Mr. Parker's Notebook Pages

Student Created Art

Mr. Parker's PowerPoint

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B. Economic Systems