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Economic Systems
The organized way a society provides goods and services to meet the needs and wants of its citizens.
System in which habits, customs, and religion are the reasons for making economic
decisions.
Subsistence: people make goods for themselves and their families. There is little
surplus. To subsist is to survive!
Cottage vs. Commercial Industry: Small industry that begins in the home vs. a large,
corporate industry.
System that lets competition among businesses determine the price of products.
The businesses’ need to make profits drive their decisions.
Capitalism: Economic system in which businesses, industries and resources are
privately owned. The government’s role is only to protect property rights and
prevent businesses from cheating.
A market based economy in which the government also plays a role.
Socialism: The government owns and operates many basic industries. Other
businesses are privately owned.
Economic system in which the government makes the economic decisions.
Communism: An economic and political system in which the government owns or
controls almost all the means of production.
Market: An arrangement that allows buyers and sellers to exchange goods and services.
Market Economy: An economic system in which people make the economic decisions.
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items that satisfy people’s wants
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people and companies that make and
sell goods
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people who buy goods and services
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a system of money used to exchange
for goods and services
Supply and Demand: Determines price and quantity
Capital Resources: Start-up money
Profit: What remains after the costs of running a business are paid
Specialization: To produce or provide only one or a few goods or services