Economic Systems
Published on Dec 09, 2015
Summary of economic systems.
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PRESENTATION OUTLINE
What is economics?
How we make & buy things, spend & save $
Economics is the study of how individuals, businesses, and nations make things, buy things, spend money and save money.
People who study economics are called economists.
People who study economics are called economists.
Photo by toolstop
Non-Cultural Influences
on Economic Systems
Physical geography can influence the economy of a region.
Photo by kuyman
1. location & accessibility
2. topography & climate
3. available resources
Location and accessibility influence trade and production.
Climate and topography (physical barriers) determine what can be produced, when it can be made.
The available resources determine what can and cannot be made in a region.
Climate and topography (physical barriers) determine what can be produced, when it can be made.
The available resources determine what can and cannot be made in a region.
Photo by GV_Environ
Factors of Production
Land & Labor
All economic systems need at least two things:
land (natural resources)
labor (people to make things)
land (natural resources)
labor (people to make things)
Photo by amira_a
Traditional Economy
- revolves around family
- divide work by gender
- mainly agriculture
- slow to make changes
Photo by Konabish ~ Greg Bishop
Command Economy
- no private ownership of land or capital
- production & pricing controlled by government
Photo by Rosa Dik 009 -- on & off
Command Economy
- lack of competition
- consumer interests a low priority
- worker motivation focused on patriotism & good of the nation
Photo by Rosa Dik 009 -- on & off
Free-Market Economy
- decisions made by individuals
- individuals own means of production
- high degree of individual freedom.
- no government intervention
Photo by Angela Radulescu
Free-Market Economy
- large variety of goods & services
- individuals act in their self-interest
- competition results in efficiency and lowest price for consumers.
Photo by Angela Radulescu
Mixed Economy
- economic system in most nations today
- combines gov't regulation, tradition, and free-market economies.
Photo by luisvilla
Mixed Economy
- economic decisions made by individuals with gov't oversight
- Minimum wage, worker safety, 8 hr work day, social security: examples of gov't intervention.
Photo by luisvilla
Primary Activities
- hunting & gathering
- agriculture
- extracting minerals from the earth.
- fishing
- lumbering
Photo by marfis75
Subsistence Farming
- small land holdings with large numbers of laborers
- almost half world's population engaged in it
- result of Green Revolution
Photo by marfis75
Green Revolution
- 1969-1999: increased production of grains
- due to improvements in farm management & seed types
Photo by toehk
Green Revolution
- benefits led to population increases (India for example)
- benefits not uniform: less improvement in sub-Saharan Africa
Photo by toehk
Commercial agriculture
- controlled by market forces: supply & demand
- influenced by gov't policies: subsidies
- crop choices guided by profit & competition
Photo by Michael | Ruiz
Other Primary activities
- Fishing/Forestry: use of renewable resources
- Mining: removing non- renewable resources
Photo by Werner Kunz
trade in primary products
- % of world trade declining
- important for developing countries
- trade depends on changes in world market prices.
Photo by kenteegardin
transnational corporations
- international structure of manufacturing
- 90% largest 100 have HQ in USA, Japan, or EU
transnational corporations
- most capital goes to advanced countries.
- corp. often lose their original national identity.
- difficult to regulate.
transnational corporations
- four industrial clusters:
- eastern Anglo-America
- western & central Europe
- eastern Europe
- eastern Asia
high tech manufacturing - sun belt
- developing electronics & robotics
- less dependent on location of raw materials
Photo by Robert S. Donovan
Service Sector
- growing in older, industrialized economies
- replacing Secondary Activities in US economy.
- becoming largest sector of US economy.
Photo by Doug Waldron
quaternary activities
information - research - management
advanced services
- information handling, management, & research
- especially in computer areas
Photo by Robert S. Donovan
advanced services
- post-industrial shift: services over manufacturing
- increase access to state-of-the-art equipment and services.
- knowledge is the new commodity
Photo by Robert S. Donovan
factors of development
- resources
- political Stability
- accessibility
- government policy toward foreign investment
- good relative location
Photo by Stuck in Customs
