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Island of Mocha Essay The Island of Mocha in the video is an example of a traditional economic system evolving into a market system. Every person plays a key role in this traditional system. They had fisherman, coconut collector, melon seller, lumberman, barber, doctor, preacher, brownies seller, and a chief. The Mochans got sick of trading goods all across the island just to get the things that they want or needed. The Chief decided that they would use clam shell for currency instead of trading. The first type of economic system that they movie shows is a traditional system. A traditional economy is an economic system in which the allocation of scarce resources and other economic activity is the result of ritual habit or customs. In other words a traditional economy is a barter or trade system, everybody decides WHAT WHEN and FOR WHOM. When the video first starts the Mochans had to trade all over the island to acquire what needed. After a while they had enough of trading the chief decided to switch to currency instead of trade. The economic system that they switched to is called a market economic system. A market economy is an economic system in which supply, demand, and the price system help people make decisions and allocate resources. So with a market economy you decide WHAT WHEN and FOR WHOM. In the movie Pablo the lumberman starts up a company and sells stock to allow him to be able to get all of the supplies needed. Big Daddy had triplets and need lumber to make the nursery bigger, since they switched to a market economy he had no money because the islanders would give the chief a portion of what they had. So Big Daddy had to start a tax in order to pay for the expansion of the nursery. Since all the businesses were all doing so well every business wanted to expand so the demand for lumber was great which caused a lumber shortage, the lack of resources the price when up which cause inflation all over the island. With inflation going on Big Daddy had to do something in order to stop it. The island of Mocha was going in to a recession so Big Daddy took control and put a price freeze on everything. Now the economic system turned into a command economy. A command economy is an economic system characterized by a central authority that makes most of the major economic decisions.