Introduction to Economics
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?
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 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 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.