AP Macro Market Economy vs. Command Economy. The 3 Basic Economic Questions What should a country...

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AP Macro Market Economy vs. Command Economy

Transcript of AP Macro Market Economy vs. Command Economy. The 3 Basic Economic Questions What should a country...

Page 1: AP Macro Market Economy vs. Command Economy. The 3 Basic Economic Questions What should a country produce? How to produce? For whom to produce?

AP Macro

Market Economy vs. Command Economy

Page 2: AP Macro Market Economy vs. Command Economy. The 3 Basic Economic Questions What should a country produce? How to produce? For whom to produce?

The 3 Basic Economic Questions

• What should a country produce?• How to produce?• For whom to produce?

Page 3: AP Macro Market Economy vs. Command Economy. The 3 Basic Economic Questions What should a country produce? How to produce? For whom to produce?

Market Economy

• An economy in which production and consumption are the result of decentralized decisions by many firms and individuals.

• There is no central authority telling people what to produce or where to ship it.

• Each individual producer makes what he or she thinks will be most profitable.

• Each consumer buys what he or she chooses.

Page 4: AP Macro Market Economy vs. Command Economy. The 3 Basic Economic Questions What should a country produce? How to produce? For whom to produce?

Market Economy

• In market economies, producers are free to charge higher prices when there is a shortage of something and keep the profits.

• High prices and profits provide incentives for producers to make more of the most-needed goods and services and eliminate shortages

Page 5: AP Macro Market Economy vs. Command Economy. The 3 Basic Economic Questions What should a country produce? How to produce? For whom to produce?

• Economies tend to be skeptical of any attempt to change people’s behavior that doesn’t change their incentives.

• For example, a plan that calls on manufacturers to reduce pollution voluntarily probably won’t be effective

• A plan that gives them a financial incentive to do so is more likely to succeed.

Page 6: AP Macro Market Economy vs. Command Economy. The 3 Basic Economic Questions What should a country produce? How to produce? For whom to produce?

Command Economy

• An economy in which industry is publicly owned and there is a central authority making production and consumption decisions.

• Command economies have been tried, most notably in the Soviet Union between 1917 and 1991.

• They did not work very well.• Producers in the Soviet Union routinely found

themselves unable to produce because they did not have crucial raw materials, or they produced them but then found nobody wanted what the central authority had them produce.

Page 7: AP Macro Market Economy vs. Command Economy. The 3 Basic Economic Questions What should a country produce? How to produce? For whom to produce?

Command Economy

• Problem with command economies is lack of incentives (rewards and punishments that motivate particular choices)


P. 1 Classification according to the allocation of resources PPTPPT CH.2 BASIC ECONOMIC PROBLEMS 問題 What to produce? How to produce? For whom ( 為誰 ) to.

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*(denotes what percent of students missed the question) Basic Concepts (85%) (85%) 1. In a mixed economy, what to produce and how much to produce are.

*(denotes what percent of students missed the question) Basic Concepts (85%) (85%) 1. In a mixed economy, what to produce and how much to produce are.

Essential Question: How do economic systems answer the questions of what, how, and for whom to produce?

Essential Question: How do economic systems answer the questions of what, how, and for whom to produce?

Economic Systems - Mr. Tyler's Lessons · Economic Systems •Economic System - the method used by a society to produce and distribute goods ... how to produce it, and to whom to

Economic Systems - Mr. Tyler's Lessons · Economic Systems •Economic System - the method used by a society to produce and distribute goods ... how to produce it, and to whom to

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Economics in Africa and Asia. All Economic Systems seek to answer the three basic economic questions 1) What to produce? 2) How to produce? 3) For whom.

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UNIT 1 - EconomicsUNIT 1 Final Review Three Fundamental Questions of Economics WHAT to produce HOW to produce FOR WHOM to produce Need vs. Want Need: basic requirement for survival

UNIT 1 - EconomicsUNIT 1 Final Review Three Fundamental Questions of Economics WHAT to produce HOW to produce FOR WHOM to produce Need vs. Want Need: basic requirement for survival

2.1 Economic systems...Economic systems Who in an economy decides what goods and services to produce, how to produce them and who to produce them for, and how are these decisions are

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Basic Decisions Production possibilities define the output choices confronting a nation: ◦ WHAT to produce ◦ HOW to produce ◦ FOR WHOM to produce.

Basic Decisions Production possibilities define the output choices confronting a nation: ◦ WHAT to produce ◦ HOW to produce ◦ FOR WHOM to produce.

Chapter 2 · Chapter 2 - Limits, AlTernatives and Choices Three Fundamental Questions: What to produce? How to produce? For whom to produce? There is no free lunch - Because there

Chapter 2 · Chapter 2 - Limits, AlTernatives and Choices Three Fundamental Questions: What to produce? How to produce? For whom to produce? There is no free lunch - Because there

10.29.14.park .kwangseo.the estimation of the ocean economy and coastal economy … · 2018-05-03 · ocean economy or ocean industries produce around from 1% to 5% of their own country’s

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Governments - Thomas County School District Economy * Definition: economic decisions are based on habit, tradition, or custom * What to Produce? - past traditions * How to Produce?

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educationhp.orgeducationhp.org/Files/Instruction.pdf10_51_2017_12_07_08.pdfThe concerned candidate shall have to produce a character certificate from a Gazetted Officer to whom he/she

educationhp.orgeducationhp.org/Files/Instruction.pdf10_51_2017_12_07_08.pdfThe concerned candidate shall have to produce a character certificate from a Gazetted Officer to whom he/she

Prices Chapter 6. Lesson 1: How Prices Work Essential Question: How do prices help determine What, How, and For Whom to produce?

Prices Chapter 6. Lesson 1: How Prices Work Essential Question: How do prices help determine What, How, and For Whom to produce?

How much does the economy produce? The quantity that an economy will produce depends on two things- The quantity of inputs utilized in the production.

How much does the economy produce? The quantity that an economy will produce depends on two things- The quantity of inputs utilized in the production.

Chemical companies must produce as much product as possible ATOM ECONOMY.

Chemical companies must produce as much product as possible ATOM ECONOMY.

CHAPTER 18 | PUBLIC ECONOMY 365 18|Public Economy · CHAPTER 18 | PUBLIC ECONOMY 371. Figure 18.2A Voting Cycle Given these choices, voting will struggle to produce a majority outcome.

CHAPTER 18 | PUBLIC ECONOMY 365 18|Public Economy · CHAPTER 18 | PUBLIC ECONOMY 371. Figure 18.2A Voting Cycle Given these choices, voting will struggle to produce a majority outcome.

1. What to produce? 2. How to produce? 3. For whom to produce?

1. What to produce? 2. How to produce? 3. For whom to produce?

Canada’s Economy. 3 Economic Questions… What to Produce? –Businesses decide and government approves/denies it How to produce it? –Businesses decide &

Canada’s Economy. 3 Economic Questions… What to Produce? –Businesses decide and government approves/denies it How to produce it? –Businesses decide &

How Markets Work ECO 285 - Dr. D. Foster. Three (Economic?) Questions: 1. What to produce? 2. How to produce? 3. For whom to produce? must We must decide!

How Markets Work ECO 285 - Dr. D. Foster. Three (Economic?) Questions: 1. What to produce? 2. How to produce? 3. For whom to produce? must We must decide!