Traditional Economic System
From Generation to Generation
Examples: Third World Countries (usually located in Africa, Asia, Latin America, and the Middle East).
- only produces goods and services which are required for survival
- no surplus or wastage of resources for unnecessary goods and services
- defined roles eliminate conflict
- lower productivity
- lower development of society
- lower standard of living
- resist change
- restricts specialization
Analysis of the 3 economic questions:
- What should be produced: What best ensures its survival.
- How should it be produced: The methods of production and distribution should be the same as they always have been which are determined by custom and tradition.
- For whom will it be produced: Traditional families and social units