Download Economic Systems of the World.

Pizza Party…its just pizza how
hard can it be? How many
and what toppings?
 How
many Pizzas should we order for the
class???
 What toppings?
 From where?
Review
1.
2.
3.
4.
5.
6.
7.
8.
What is economics?
What are the three basic economic
questions?
Give me two other names for the factors
of production.
What happens in the ‘factors’ market?
What happens in the ‘product’ market?
How can specialization make a society
wealthier?
How does the assembly line work?
What does the production possibilities
curve show?
Traditional
Market
Command
Economic
Systems of the
World.
What are the major types of
Economic systems ?
How does each answer the 3
Basic Economic Questions?
Traditional Economic Systems
Tradition, Tradition, Tradition






What, how and for whom to produce are
answered by ritual, habits, customs
Tribal Societies Across the world
Communal living, little private property
Strenghts
Weaknesses
Methods Work
Subsistence living
Everyone knows Role
Low standard of living
Discourages new ideas
Never changes
Review
 Describe
a traditional economic system in
three sentences.
 Also, are most economies solely
traditional, solely command, or solely
market? Or are they a mix of the three?
Warm- UP - Review
 Describe
how the three economic
questions are produced in a traditional,
market, and command economy:

What do you produce?

How do you produce?

For whom?
Quick Overview video
Command
 Gov’t
answers 3 Basic Economic Questions
 Limited Private Property
Rights
 Government owns all resources!!!!!
Strengths
Weaknesses
Changes quick
No incentives
Basic needs met (in
theory)
Central planning can’t
meet consumer wants
Massive bureaucracy
The Soviet Economy
 What
is the reason why people didn’t
work hard?
Expansion of Communism

Circle the words that fit with
Command Economies
Lots of Choices
government housing
Economic freedom
Karl Marx
Merit Pay
Joseph Stalin
Cuba
Incentives to work
Basic needs met
Get what you need
Slow to change
No Technology Equal distribution of Wealth
Happy Consumers
Government control
Private Property
Fast to change
Day to day flexibility
Central Planning
North Korea Tribes
Adam Smith
Review
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Give me three example of items that are scarce.
Why would a college athlete leave early to play in the
pros?
Define GDP.
What is efficiency? How is it different than
productivity?
How might a business or company improve efficiency?
What are consumer goods? What are capital goods?
Draw a PPC (production possibilities curve) that shows
the shift caused by an increase in technology.
Who answers the basic economic questions in a
command economy?
Who answers the basic economic questions in a
traditional economy?
What about in a market economy?
C
O
M
M
A
N
D
Advantages
Traditional
Command
Market
Disadvantages
Examples
Review – Where is the U.S.?
Why? Write it down in 3
sentences.
D
E
G
Traditional Command
C
A
B
Market
F
Market Economy: Capitalism
USA, Japan, UK, South Korea, South Africa, Canada
What is an example of a
pure market economy?
Anybody ever try this?
CONSUMER SOVEREIGNTY
WHY DID COKE CHANGE BACK TO CLASSIC?
CORE OF CAPITALISM
Voluntary
Exchange
In our economy,
are we
Economic
Freedom:
In our economy,
do we
freedom
make
Free tohave
choose
jobs, to
what
to buy/sell,
employees choices?
to dofree
business
Buyers forced
and sellers
to do what
they want against our will?
In our economy,
Competition
Private Property
In our economy, who
Rights
owns most of the factors
Peopleofcontrol
possessions
production?
and can gain wealth
whatcompete
do
Producers
do
withbusinesses
one another.
against
Lowers
costeach
and
other?
Increases
efficiency
Profit
Motive
In our economy,
Individuals
and
what motivates
Businesses can
individual/entrepre
make and keep
neurs/businesses?
profits.
Mixed
Economy
KNOW YOUR ROLES!!!!!!!!!!!!!!!!!!!!
Modified Private
Enterprise Economy
The Entrepreneur
The Government
The Consumer
“The Spark plug of the
economy”
-risk takers
-innovators
-theyWhat
organize
4 factors
rolethe
does
the
of entrepreneur
production play in our
Protector of consumers
rights and freedom, private
property
Provider of services like
national
defense,
welfare,
What
role does
the
education,
public
goods
government
play
in our
Consumer
economy?
Regulator of markets to
ensure competition and
safety
Consumer Sovereignty
- rulers of the market
- Answer the 3 basic
questions
economy?
What role do WE play
within our economy?
COMMUNISM
1. a theory advocating elimination of private property
2. a system in which the means of production and social
product are owned in common and are available to all as
needed
How is this different
than capitalism?
DBQ Exercise
CAPITALISM
Economic system in which private
citizens own and use the factors of
production in order to generate profit
(profit motive)
It is not a command economy where the
government owns and use the factors of
production and centrally plans the
economy
In talking about the U.S. economic system
competition
What is ONE
What is it?
Where are you
most likely to see
the word?
What is it not?
word to help you
remember it?
Economic
System
Traditional
Market/
capitalism
Command/
communism
Socialism
(predict)
Private
Ownership
of resources
High, medium,
low, or NONE
Profit Motive Consumer
Sovereignty
Competition
Government
Regulation
Redistribution
of Wealth
REVIEW
1. What percentage of the world’s economies experiences
scarcity?
2. What entity answers the questions in a command economy?
3. What motivated entrepreneurs and businesses in a capitalist
economy?
4. Why is competition good for consumers?
5. What guides economic activity in a market economy?
6. Define GDP.
7. What will happen to the PPC if technology is introduced?
8. Most economies are neither strictly market or strictly
command, they are ______________.
9. Adam Smith’s invisible hand leads society towards better
outcomes through individual _______________.
10. What does voluntary exchange mean?
REVIEW FOR TEST
EDNESDAYWAY!
1-4 relate to graph:
1.
What is the opp cost from
moving from point A to D?
2. What is the opp cost from
moving from point D to A?
3. At what point are resources not
being used efficiently?
4. How might this economy be
able to accomplish point C?
___________________________
Broad Economic Goals
•Economic Freedom
•“Choices”
•Buy/Sell, Employment, etc…
•Economic Efficiency
•“Get the most from the scarce
resources”
•Invest in Human Capital &
Technology
•Economic Equity
•Equal opportunity or outcomes –
FAIRNESS!
•Economic Security
•Social Security, Welfare,
Unemployment Insurance
•Economic Stability
•Stable prices (Measured by
inflation) and full
employment/low
unemployment
•Economic Growth
•Measured by GDP
•“Increase the PPC”
Economic
Goal
Efficiency
Equity
Freedom
Growth
Security
Stability
Diary A
Diary B
Stop, Collaborate and Listen
Communism
?
Capitalism
China, France, Sweden, Venezuela
SOCIALISM
-Socialism- mix of market and
central planning
-Who answers 3 basic questions?
-The government owns and controls
key resources and industries
-Basic needs of the people are met
by the government
-People pay high taxes to fund things
like healthcare, insurance, and other
social services
Market economies… ex:
Capitalism
 People/individuals
answer the What, How,
For Whom to Produce
 Adam Smith- laissez faire “leave it alone”

Invisible hand of self interest
Strengths
Weaknesses
Flexible
Individual Freedom
Variety of products
High consumer
satisfaction
Private property rights
Innovation
Slow to change
Allows failures
Winners/losers
Greed
Circle the words that fit with
market Economies
Lots of Choices
government housing
Economic freedom
Karl Marx Profit
Merit Pay
Joseph Stalin
Cuba Japan
Incentives to work
Basic needs met
Get what you need
Slow to change
No Technology Equal distribution of Wealth
Happy Consumers
Government control
Private Property
Fast to change
Day to day flexibility
Central Planning
North Korea Tribes
Adam Smith
THE TRABLANT
Time to Think……
 How
would your life be different if you
lived in a market economy??
 It
would not be any different because you
currently live in a Market Economy….Silly
Home work: Letter to a friend
 Boys,
You are living in a Command
economy, girls Traditional economic
systems.
 Write a letter to a friend living here in the
USA. Discuss how your lives are different.
Discuss what you like and do not like
about your economic system and if you
would prefer to live in the USA.
 ¾ to 1 page in length
VE4 Activity
REVIEW – 5 SENTENCE
PARAGRAPH
1.
Describe the economic system we have in the U.S.
Use the following words:
Mixed
Command
Government
Market
Capitalism
REVIEW
1.
2.
3.
4.
5.
6.
Define opportunity cost.
What is scarcity?
How does division of labor work on an assembly line?
What does efficiency mean?
What are the four factors of production? What are the synonyms?
What are capital goods?