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
In the United States, all of the
systems are relevant except for command, which was never
really used. Traditional economies rely on
farming and very simple barter trading.
Early colonist used this form of economy within their
own communities, and to some extent, with other
colonies. A market economy
is controlled by the forces of supply and demand.
The United States used a market economy for much of its
history, and it is largely responsible for the growth of
the country. 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 operates under
this system today.
Included in this theme are
factors of production, which are the resources
necessary to produce goods and services. These
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
This site is designed to aid students in reviewing the
economic systems and factors of production in
United States history. This site should be used in
preparation for the New York State Regents Exam in
United States History and Government. In addition,
students may test their knowledge of the material
presented here by accessing multiple-choice questions
from past Regents Exams.