17.

2 ECONOMIC SYSTEMS &

THEIR CHARACTERISTICS
 Good Afternoon Year 9!
Title: Economic Systems
Learning intentions:
• To define an economic system.
• To identify and outline the four main
economic systems.
Date:
1 Write down the title.
Answer the following questions:
1) What are the three types of resources in
2 the economy?
2) What natural resources are needed to make
chocolate?
3) What is scarcity ?
THE PROFIT MOTIVE EXPERIMENT

Profit motive is the goal of a business is to maximise profit.

Therefore, the business will do everything in its power to increase
profits.

1. In groups of three, you are going to be given 1 minute to make as many paper
aeroplanes as you can.

2. Count how many planes your group made.

3. This time, you have 1 minute to make as many paper aeroplanes as you can but
your teacher will reward you with $2 towards the canteen.
WHAT IS AN ECONOMIC SYSTEM?

Way of organising the production & distribution of goods & services

Think, Pair and Share: Imagine that you are the leader of
an entire island.
To have a functioning economic system, 3 essential questions need to
be answered:

What to How to For whom

produce? produce? to produce?
What to produce?

• Eg: Fish and coconuts

How to produce?

• Ask some people to cook the fish /

use a machete to split the coconut

For whom to produce?

• Distributing food equally / letting
the person cooking the fish chose
who to sell it to
 TYPES OF ECONOMIC SYSTEMS

1 TRADITIONAL / 4 MIXED
SUBSISTENCE
ECONOMY
ECONOMY

2 MARKET 3 PLANNED
ECONOMY ECONOMY
1 TRADITIONAL /
SUBSISTENCE
ECONOMY

Producers are self-sufficient

Produce enough to survive instead of aiming for profit

Money is not used

Hunting
Depends on availability
What to produce? Gathering
of resources through
Growing food
Influenced by customs
How to produce?
& religious beliefs

For whom to
Usually shared
produce?
 SUBSISTENCE
ECONOMY IN ALASKA

Self-sufficient inhabitants
in rural Alaska fish and
hunt for food.
 SUBSISTENCE
ECONOMY IN UGANDA
Q: Why does the President of Uganda want to stop
subsistence agriculture?
President Yoweri Museveni has singled out
continued subsistence agriculture by the majority
of the Ugandan population as a major factor that
has made it difficult for the country to reap enough
from its cherished agricultural potential.
Museveni observed that the continued presence
of 69% of the Ugandan population engaged in
subsistence agriculture has posed a great
challenge to the advancement of the agricultural
sector in Uganda.
The President, therefore, appealed to all
stakeholders to mobilise farmers nation-wide to
abandon subsistence farming for commercial
profit oriented agriculture if the population is to
be guaranteed food and income security as well
as getting rid of poverty.
2 MARKET
ECONOMY

Producers exchange goods & services with customers in return for money LIKE A MARKET

Most of productive resources (labour, natural & capital) Owned by individuals / firms

In the real world, a pure market economy does not exist. Most countries have big elements of a market
economy.

What to produce? Producers decide based on what consumers want

How to produce? Producers chooses most cost-effective production method

For whom to
Determined by who has the money to pay for goods & services
produce?
3 PLANNED
ECONOMY

All productive resources are owned by the government on behalf of the people.

Emphasis may be on areas deemed desirable by gov, eg: defense instead of producing
goods & services that consumers want
A pure planned economy does not exist. But countries like North Korea closely resembles it

What to produce?

Majority of productive
How to produce? Government determines them ALL resources owned by ’the state

For whom to
produce?
 33 NORTH KOREA”S PLANNED
ECONOMY

• Many consumer goods are short supply

• Trade in illegal goods through the black market

• Ideology called ‘Juche’

https://www.youtube.com/watch?v=0hDuOkY__dk
4 MIXED
ECONOMY

Resources are owned by a mix of government and private enterprises.

Most countries have a mixed economy.

What to produce?

How to produce? Government and Private Enterprises

For whom to
produce?
4 MIXED
ECONOMY

https://www.youtube.com/watch?v=8YMURolHx8Y
TEXTBOOK
TASK
Read chapter 17.2 (pages
424-427) and complete
questions 1-5.
 ACTIVITY

Using the laptops, create a poster on canva that

explains the four different types of economic
systems.
Make sure you include diagrams/pictures.