Homework: Find people who know the four types of economies by Friday. (You may work in groups)
Market Economy/Freedom of Choice
Hello sir, do you run this shop?
Could you explain market economy to me?
Would you say this shop represents market economy?
Yes, I do.
Yes, I would.
Command Economy/Private Property
Hey mom, you're from Cuba and Cuba has a command economy...What is command economy?
Well command economy is when the government controls the resources. The government decides what people get and sell basically.
So what happens to private property in command economy?
Reyna, Sarah, Bryce, and John decide they will work together. They will each find and talk to someone who knows about a different economy: Reyna will talk to someone about a market economy, Sarah will talk to someone about a command economy, Bryce will talk to someone about a mixed economy, and John will talk to someone about a traditional economy.
Excuse me, french teacher, but France is a mixed economy correct?
The shopkeeper explains to Reyna that market economy is where the consumers control the resources through buying and selling in the market place. His shop is an example because the consumers have the freedom of choice to choose what they want to buy individually and he supplies what the consumer's greatest wants and are to the best of his ability.
Excuse me but for school I need to learn what a traditional economy is would you happen to know?
In a command economy, due to the government owning the resources, people have very little private property. When they do have private property there are strict controls on it . Command economy is unlike market economy because the people don't have freedom of choice and have tight restrictions on any type of private property.
Benefits of Principles of Capitalism
Now that you know what the four economies are and the four principles of capitalism(freedom of choice, private property, profit, and competition), explain why they are beneficial to an economy.
Mixed economy still uses supply and demand to determine prices, but lets the government oversee things like the military and international trade. In mixed economies part of a companies profit, or amount of money they earn, goes to the government through taxes. The government uses those taxes to build roads, schools, libraries, etc.
A mixed economy is a combination of command and market economies...
What is a mixed economy?
Traditional economy can be found in parts of Africa. Competition, or the strive to gain something by defeating others who are trying to do the same is different in traditional economies; in traditional economies instead of competing for business they compete for scarce natural resources, and rely on trade from people they do not compete with to get other supplies.
A traditional economy is where traditions, customs, and beliefs help shape the goods and the services the economy produces.
I do actually...
The four principles of Capitalism are important to an economy because by looking at how each principle is used in an economy you can tell what kind of economy it is. The principles also drive prices of things, and help determine what is available to purchase. Profit, competition, freedom of choice, and private property are important to the economy.