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What types of economies are there?
· Free market economies ­ Pure Supply and Demand
Advantages:
· a free market system relies more on competition and
less on cooperation.
· Competition can bring out the most innovation and
lowest prices.
· There is high incentive for individuals to create,
improve, and generate progress.
· Thus, strictly economically speaking, a free market
economy sees much more success than other systems.
· It creates the most jobs and most
value/money/growth/development.…read more

Slide 3

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What types of economies are there?
· Free market economies
Disadvantages:
· Just as competition brings out the best in people, it also
brings out the worst.
· Businesses sometimes make short-sighted decisions which
adversely affect the environment or its customers.
· A purely free market system, with no government
interference or regulation, leaves the burden of
responsibility on the corporation, which can pursue profits
at the expense of ethics.
· Government oversight is usually evident to ensure the
safety and fairness to the consumers…read more

Slide 4

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What types of economies are there?
· Centrally planned economy /Command economy (Communism)
Key points
· People are told what job they will do, their told how much of a product
they get, they're expected to work a lot and receive little in return.
· The communist mantra is "From those according to their ability and to
those according to their need". This may sound great except it doesn't
work in reality.
· People respond to incentives. If the most effective way of receiving a
reward is to act needy rather than to work hard then guess what people
are going to do?
· One may say that a disadvantage of a free market economy is that it is
very inequitable. While this is true if you compare a poor person from a
free market country to an average one from North Korea or Cuba you'll
likely find that the "poor" person from the free market economy is better
off than the one from the communist country.
· So if you'd rather be poorer as long as everyone else is poor too then you
can consider the inequality of income from free markets to be a
disadvantage and the equality under centrally planned to be an
advantage.…read more

Slide 5

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Mixed Economy
· This tries to take the best of Free and
Centrally controlled markets
­ Some aspects of the economy are influenced by
supply and demand
­ Some aspects are controlled by the Government…read more

Slide 6

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Work to do...
· Using the map, identify six countries and find
out what type of economic system is in place
there…read more

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