Regents Prep: Global History: Economic Systems
Introduction
The study of economic systems includes traditional, market, command, and mixed 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 the 20th century 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.

 

Economic Systems
Traditional

 

Market
  • Based upon Supply and Demand
  • Usually focus on consumer goods
  • Little government control
Command
  • Controlled by strong, centralized government
  • Usually focuses on industrial goods
  • Little attention paid to agriculture and consumer goods
Mixed
  • 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.

 

Created by Jeffery Watkins
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