World Geography / Unit 4: Economic and Political Geography
4.2 Economic Systems
Notes
An economic system answers what to produce, how to produce it and who gets it.
- Traditional: customs and family roles decide; common in subsistence farming and herding communities.
- Market (capitalist): private owners and consumers decide through supply and demand and competition.
- Command: the government makes the main decisions and owns most resources (Cuba, North Korea; the Soviet Union in the past).
- Mixed: combines private markets with government roles such as schools, roads and regulation. Most countries today are mixed.
- Subsistence farming grows food mainly for the farmer's own family; commercial farming grows food to sell.
Practice
In which system does the government control most production decisions?
A command economy is centrally planned.
Most modern countries, including the United States, are best described as
They combine private enterprise with government regulation and services.
A family grows crops mainly to feed itself and trades the extra at a local market. This is
Subsistence farmers produce mostly for their own use.
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