Download Lesson Four: Market Systems - North Clackamas School District

UNIT ONE: LEARNING OBJECTIVES:
North Clackamas School District Social
Studies Priority Standards:
 Econ 53. Describe characteristics of
command, market, traditional, and mixed
economies and how they affect jobs and
standards of living.
 Econ 59. Demonstrate the skills and
dispositions needed to be a critical
consumer of information.
WE WILL BE USING CORNELL NOTE
TAKING FORMAT TODAY!
Don’t be a victim…..
Own the day!
Relax and enjoy the ride
In Economics Class!
LESSON FOUR: DAILY LEARNING TARGET
I Can…. Describe The Three basic Economic
Systems
QUIZ OVER UNIT 1 (LESSONS 1-4)
NEXT CLASS
50 POINTS SUMMATIVE (80% CATEGORY)
I Can …….
 USE CORNELL NOTES
It is……….
 30 MULTIPLE CHOICE
 15 MATCHING
 ONE PPC PROBLEM
Follow the Dancing M&Ms Today!
Daily Warm up Question (use your Cornell Notes)
Why are some countries rich and others poor?
Look at the map and write a few bullet pt. answers on your
whiteboards as a group
Low, Middle and High Income
Levels of development vary greatly among nations.
High income economies
[Per Capita GDP $9,386 +
Middle income economies
[Per Cap. GDP $765-$9,386
Low income economies
[Per Cap. GDP-below $764
No data available
An economic system that permits the conduct of business with
minimal government intervention is called free enterprise. The
degree of government involvement in the economy varies among
nations.
1. Hong Kong
3. Ireland
5. United States
20. Belgium
31. Spain
48. France
101. Brazil
126. China
146. Russia
148. Venezuela
156. Cuba
178. North Korea
Three Economic Questions
•
Every society must answer three economic
questions…
1. WHAT?
2. HOW?
3. FOR WHOM?
•
How that society answers the questions
determines which type of economic system
that society employs
Specialization Use of Money
which makes
workers more
efficient
• Economic activity is based on ritual, habit and custom.
•
•
•
•
Everyone knows their role.
Little uncertainty over what to produce or how to produce.
The question of For Whom to produce is answered by custom.
Life is generally stable, predictable, and continuous.
• Tends to discourage new ideas.
• Lack of progress leads to lower standard
of living.
Examples of Traditional
Economies in history:
Native Americans
Tribes in Africa
Amish Community
Mbuti Pygmies (Congo)
• Change direction drastically in a relatively
short time (The USSR went from an agrarian
to industrial nation in a very short time).
•
•
•
•
•
Not designed to meet the wants and needs of individuals.
Lack of incentives to work hard leads to unexpected results.
Large bureaucracy for economic planning.
Not flexible in dealing with minor day to day problems.
People with new or unique ideas are stifled.
The command economy is a key
feature of any communist society.
China, Cuba, North Korea and the
former Soviet Union are examples of
countries that have command
economies.
• People and firms act in their own best interest
to answer economic questions.
• Markets allow buyers and sellers to come together
in order to exchange goods and services.
•
•
•
•
•
•
Markets can adjust over time.
Freedom exists for everyone involved.
Relatively small degree of governmental influence.
Decision making is decentralized.
Variety of goods and services are produced.
High degree of consumer satisfaction.
• The primary weakness is deciding for whom to
produce.
• The young, sick and old would have difficulty in
a pure market environment.
• Markets sometimes fail.
The most economically free
countries in the world are Hong
Kong, Singapore, Australia and the
United States.
 In a free market economy, the law
of supply and demand, rather than
a central government, regulates
production and labor.
Companies sell goods and services
at the highest price consumers are
willing to pay!
Think: Where would you Place the U.S.?
• On a scale of 1 to 10 (“1” being completely
Command Economy & “10” being a Free Market
Economy); where would you place the United
States?
Now Write on your Whiteboards!
5. On a scale of 1 to 10 (1 being completely Command
Economy & 10 being a Market Economy); where would you
place the United States? Please explain why in a well crafted
detailed paragraph.
We will share out in table groups
In the United States we have what
is known as a MIXED
ECONOMY…in fact pretty much
every country is a mixed economy
combining aspects of command
and market economies.
1
The United States probably
would lie around 7 and 8
10
Adam Smith was the first economist.
In his book, The Wealth Nations (1776),
Adam Smith explained how free markets
functioned.
GOALS OF A FREE MARKET ECONOMIC SYSTEM (WE
HAVE A “MIXED ECONOMY”)-U.S.
Efficiency (maximize what you have)
 Freedom (ability to make choices)
 Security (goods/services will always be
available)
 Equity (Fairness, Opportunity)
 Growth (Economy must grow with population;
innovation)

LAISSEZ-FAIRE

Laissez-faire is the doctrine that states that the
government should not intervene in the
marketplace.

It means “let them do (as they please)”.

In a free market, the government does not
regulate the economy.
The
Invisible
Hand
Specialization
The Wealth of Nations
1776
THE FREE MARKET

In a free market economy, people are free to buy
and sell whatever they want.

Obviously, we DO NOT live in a completely free
market economy.
There are some restrictions on what we can buy
and sell.
 LIST SOME NOW IN YOUR GROUP on the
whiteboard please.

In the United States today, there are some
products that we cannot legally buy. We
can buy a rifle but not this gun LEGALLY.
Demonstration #1:
• Need four volunteers…
– Round 1:
• Part A: when I say go you can try and grab as many
paper clips as possible…for every paper clip that you
grab you will receive one m and m
Demonstration#2:
– Round 2:
• Part B: when I say go you can try and grab as many
paper clips as possible from your section…for every
paper clip that you grab you will get one m and m.
Exit Ticket 1-4
(10 Points Summative)
Group Members: ______________________________________
1.Which economic system was represented by
Demonstration #1 and why?
2. Which Economic system was represented by
Demonstration #2 and why?
3. Create a table on the back of this Exit Ticket and
Include the following information:
 Three Economic Systems discussed going down the left.
 Three columns of information for each system
 Definition
 Strengths
 Weaknesses