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GEO83 - Economic Sectors & Systems (Market System/Capitalism (Describe…
GEO83 - Economic Sectors & Systems
Market System/Capitalism
Pros: Because many businesses compete in the same market, prices tend to be low for consumers
Cons: As businesses are trying to make more money, they don't care that much about the environment or social services
Describe: Producers and consumers make all the economic decisions; producers decide what goods and services to offer, consumers decide how they spend their own money. The government only provides the services to keep the economy running (road building, policing, fire protection, national defence), and they try not to interfere. Singapore is the best example
The founding father of the market system was Adam Smith. He believed in the power of the market! Money is the motivator...supply and demand! "All people are financially self-interested."
Mixed System
Pros: The government can make regulations and rules to protect the environment, workers, and the consumer.
Describe: Individuals and businesses can make many decisions, however, the government makes some decisions to encourage or to regulate businesses or to improve the quality of life. This can be rules or regulations that businesses must follow. The government tries to strike a balance between protecting quality of life and encouraging the economy without slowing it down. Canada and France have mixed systems
Cons: Sometimes the government strikes the wrong balance.
Command System/Socialism
Pros: The government can focus all of it's resources on one goal, for example China's push on economic development.
Cons: Government decisions are not always the best for the country or its citizens. An example would be the North Korea famine in the 90's.
Describe: The government controls everything from resources to services to economic decisions. The government forces its citizens to do as they are told, and citizens have little freedom. Cuba and North Korea have command systems.
People in a Command System work for the government, not for some private company.
The founding father of the Command system was Karl Marx. He believed that any person should have the right to own their labour and no one should be able to own private property and that the government (the state) should own all sources of income and profit.
By: Richard Yang (8-03)
Continued Below
Economic systems in pg 176-177, Economic sectors pg 178
GEO83 - Sectors of an Economy
Primary Industry
This industry harvests natural resources
Iron mining
Secondary Industry
Industry that makes consumer products out of natural resources
Cast Iron Pan
Tertiary Industry
An industry that provides services or sells, such as accounting or retail
Kitchen Stuff Plus
Quaternary Industry
Industry that focuses on the application of ideas and knowledge (research), like software development or education.
Researching the effects of mining on the environment
