Download Economic Systems Part 2 - Liberty Union High School District

ECONOMIC
SYSTEMS PART 2
Homework: Research Project Part 2
◦Write a short essay on the economy of
a nation you researched.
◦Be sure to include CLEAR THESIS
STATEMENT
◦Break essay down into paragraphs
(Introduction, Conclusion, Body
Paragraphs)
Homework: Research Project Part 2
◦ In your essay, you should include:
a.The type of economic system represented in the
country
b.The economic goals and values of the country
c.Background information about the country’s
economy (traditional economic practices,
resources, government inference, employment,
etc.)
Looking Ahead
◦BRING TEXTBOOKS
NEXT CLASS!!!-THIS
WILL BE GRADED
Warm Up
◦Identify three ways in which
the Free Market System has
or will impact you, either in
the past, the present, or the
future
Learning Objectives
◦Review Economic Systems
◦Analyze and Interpret the
ideas of Adam Smith
◦Build connections to your own
life
Journal 3: Adam Smith
Smith and Capitalism
◦ Capitalism: Economic system in which a country's economy is
controlled by private owners rather than the state
◦ Self-Interest: One’s own personal gain
◦ Competition: Struggle among producers for the money of
consumers
◦ Incentive: Expectation that encourages people to behave in a
certain way
◦ Laissez-Faire Economics: Limiting government intervention in the
economy
Bags of Chips- COMPETITION
◦ Recall the Bags of Chips Experiment that we did…who
represented my competition in regards to selling the Bags of
Chips? How did this impact the pricing of the Chips?
◦ I need two volunteers to represent new companies selling Chips
◦ Each producer has 20 bags of Chips to sell
◦ Each consumer has $10.00
◦ 1st Round= Each consumer can buy 1 bag of Chips
◦ Each producer will set their own prices on the bags of chips
◦ The producer with the most money can keep the extra chips
Bags of Chips- Self Interest,
Competition, and Incentive
◦How did Self-Interest impact the simulation?
◦How did Competition impact the
simulation?
◦What Incentives were provided for the
consumers and the producers?
◦How were prices impacted by Self-Interest,
Competition, and Incentives?
Warm Up
◦What role did
Competition and SelfInterest play in our
Experiment?
Learning Objectives
◦Analyze advantages and disadvantages of
Capitalism, Socialism, and Communism
◦Interpret the concept of the Invisible Hand
◦Synthesize the reasons why the Communist
economy of the USSR fell apart
Forces in the Free Market
◦ Self-Interest: Motivating force behind the Free Market
◦ Competition: Regulating force in the Free Market
◦ How is Self-Interest a Motivating Force in your life?
Provide an example from your own decisions
◦ How is Competition a Regulating Force in your life?
Provide an example from your own decisions
The Invisible Hand
◦ Invisible Hand: Way in which the market regulates itself
through self-interest and competition working together
◦ Willy’s Bagels is competing for your business with La
Costa. Both La Costa and Willy’s have come out with
new products due to the competition between these
two businesses. While both businesses want to make a
lot of money on their new products, they realize that if
they charge too much money then they will lose
business. In 2-3 Sentences explain how this scenario
shows the concept of the Invisible Hand
The Invisible Hand: Groups of 4-5
◦ Your group will be writing out a skit that shows the
concept of the Invisible Hand
◦ You will have two producers and two-three
consumers
◦ Be sure to show how Self-Interest and Competition
play a role in regulating the market
◦ Your skit must be clearly written out and will be
performed for the class
Check for Understanding
◦Do you think competition is
good or bad in economics?
Why?
◦Do you think competition is
good or bad in your own life?
Why?
Socialism and Communism
◦ Socialism: Social and political philosophy that is based on the
idea of distributing wealth equally among people through a
democratic means
◦ Communism: Political system based around a centrally planned
economy in which all economic and political power is in the
hands of the government
◦ How are these two terms similar?
◦ How are these two terms different?
◦ What examples of Socialistic or Communist countries can you
think of? What do you know about them?
Extra Credit Simulation: Comparing
Communism to Capitalism
◦Who wants Extra
Credit??? I will ask you a
question worth 30 extra
credit points
Extra Credit Question
◦What are the four types
of economic systems and
give an example of each
in the modern day
“Share the Wealth” Simulation:
Comparing Communism to
Capitalism
◦I will ask one person a
question
◦If they get it right they get a
piece of candy
“Share the Wealth” Question
◦Explain the
Invisible Hand
Concept
Warm Up
◦What did our Competition Game last
class show you about the advantages
and disadvantages of Capitalism and
Communism?
◦Would you rather live in a Communist
or Capitalistic society? Why?
Homework: Fill out Study Guide
◦Complete Study Guide by
writing out all relevant notes and
material for person, term,
concept, etc. on the Study
Guide
Learning Objectives
◦Analyze why the economy of the USSR
collapsed
◦Engage in Creative Expression
◦Interpret how the modern economies
of Russia and China have recovered
since the Cold War
Looking Ahead
◦TEST NEXT
TUESDAY
Reasons why the Soviet economy
collapsed
1. Best resources given to the military and space industries, as well
as heavy industry
-Heavy Industry: Requires a large investment to produce items
used in other industries
2. No incentives for people on collectives or in industry to work
hard due to guaranteed government employment and income
-Collectives: Large farms leased from the state to groups of
peasant farmers
3. Illegal for people to engage in entrepreneurial activity
4. Consumer goods scarce and poor quality
Check for Understanding
◦Why were consumer goods scarce in
the USSR?
◦What is “entrepreneurial activity”?
◦Are there other reasons why the USSR
collapsed? If so, what are they?
Create a Facebook Page
◦ Pretend you are a consumer living in the Soviet Union…create a
Facebook Page for yourself that shows what it was like to be a
consumer in the economy of the Soviet Union
◦ Be sure to:
1. Include pictures and graphics that depict the economic
conditions
2. Make a list of consumer goods that you like and dislike
3. Provide comments on your standard of living
4. Create some biographical information about yourself and your
country
Russia: A Nation Still In Recovery
◦ https://www.youtube.com/watch?v=AQkWkTUG3Ec
◦ What is the purpose of Russia’s Civil Chamber? How does this
institution represent a separation from the Soviet economic
structure?
◦ According to this video, how is the government of Russia
negatively impacting economics? Why do many Russians not
want to involve the government in their business?
◦ How is the low Russian unemployment rate explained?
◦ In what ways has the Russian economy changed from the days
of the USSR?
Connecting Modern World
Economies
◦What other modern nation had a similar
economy to the USSR during the Cold War
and has now changed in the modern day?
◦What similarities and differences do these
two countries have, both politically and
economically in the modern day?
China’s Rising GDP
◦ GDP: GDP: Gross Domestic Product- Total value of goods/services produced in a
country
China’s Modern Economy
◦ https://www.youtube.com/watch?v=h_hsgEgiCXc
◦ What does this video say about the relationship between the Chinese and US
economies? How do they impact each other?
◦ How does psychology play a role in international economics?
◦ What is the economic policy of China in regards to exports and consumer
spending?
◦ Why might the Chinese not be as experienced with Market economies as the US?
◦ Why are the Chinese people losing confidence in their government’s ability to
manage the economy?
◦ How do recent trends in the oil market help to predict China’s economic future?
In-class time to Start Study Guides
◦Use this in-class time
to start working on
your study guides
Warm Up
◦Why did the Soviet Union’s
Communist economy fall apart?
◦How has the Cold War and
Communism impacted the modern
economies of China and Russia?
Homework: Fill out Study Guide
◦Complete Study Guide by
writing out all relevant notes
and material for person,
term, concept, etc. on the
Study Guide
Learning Objectives
◦Interpret Free Enterprise
Vocabulary
◦Analyze how economic transitions
have impacted modern
economies
◦Enhance studying skills
Looking Ahead
◦TEST NEXT Tuesday!!!
◦Bring Quizzes to Next
Class
Vocabulary
◦ Free Enterprise: Economic System based on private and
individual decisions, rather than state control
◦ Privatization: Sell state-run firms to individuals
◦ Private Property: Property that is owned by individuals or
companies
◦ To what extent were these economic terms part of the founding
principles of the US?
◦ To what extent have these economic terms been applied to the
economies of Russia and China in the modern day?
Transition
◦ Both China and Russia’s economy are in “Transition”
◦ Transition: Period of change in which an economy moves away
from a centrally-planned economy toward a market-based
system
◦ In one paragraph: Give three examples of times in your own life
where you went through a transition. Explain what it was like for
you to go through these transitions. Were you immediately
successful or did you experience some failures? What do your
transitional experiences tell you about when a country is in an
Economic Transition?
Retaining Information
◦ What are the four types of economies?
◦ Where do China, Russia, and the US fit on the
continuum line?
a. Continuum: A range with no clear divisions
◦ Which of the four types of economies do most
modern nations have?
◦ What is the role of government in this type of
economy?
Continuum of Mixed Economies
Circular Flow Model of a Mixed
Economy
◦Answer the questions on the
Circular Flow Model of a Mixed
Economy
◦Fill out the Review Section for
the Test on the back
Exit Ticket
◦What is the main difference
between a Circular Flow
Model of a Mixed Economy
and a Circular Flow Model of
a Market Economy???