| The study of economic systems includes
economies. All of these systems attempt to answer
the same questions. What should be produced? How much? How
should goods be produced? And, for
whom? Tradition economies rely on farming and very simple
barter trading. Examples include Neolithic farming villages and
the first river civilizations. A market economy is controlled by
the forces of supply and demand. Market economies, such as
those run by the Western European democracies have allowed these
countries to grow large and strong. A command economy is
run by a strong centralized government and tends to focus on
industrial goods. The
Soviet Union and Communist China in
operated under this economic system. While short term
gains did occur, the majority of people suffered under system
that paid little attention to food production or consumer goods.
A mixed economy is a combination of market and command. The
United States and many nations in the European Union operated
under this system today.
- Based upon Supply and Demand
- Usually focus on consumer goods
- Little government control
- Controlled by strong, centralized government
- Usually focuses on industrial goods
- Little attention paid to agriculture and consumer
- Combination of Market and Command economic systems
- Market forces control most consumer goods
- Government directs industry in need areas.
Included in this theme are factors of production,
which are the resources necessary to produce goods and services.
These factors include human resources, natural resources, and
capital or money resources. Human needs and wants
also must be balanced within an economic system. Attention
must be paid to the resources humans need to survive, and to
those goods and services that serve to enhance living.
Finally, the concept of scarcity must be explored and
balanced. Scarcity is the conflict between limited
resources and unlimited need. When scarcity of any
resource occurs, new factors of production must be explored for
humans to continue to survive.
This site is designed to aid students in
reviewing the concept of Economic Systems, Factors of
Production, Needs and Wants, and Scarcity in preparation
for the New York State Regents Exam in Global History
and Geography. In addition, students may test their
knowledge of the material presented here by accessing
multiple-choice questions from past Regents Exams.