Quick Draw: Pizza Party…its just pizza how hard can it be? How many and what toppings? How many Pizzas should we order for

the class??? The School???? All high schools in Georgia??? All high schools in the USA????

Economic Systems of the World.What are the major types of Economic systems ?How does each answer the 3 Basic Economic Questions?

Traditional

Market

Command

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 Advantages Disadvantages Methods Work Subsistence living

Low standard of living

Discourages new ideas Never changes

Command… ex: Communism Gov’t answers 3 Basic Economic Questions No Private Property Total Government Control RightsGovernment owns all resources!!!!!

Strengths WeaknessesQuick Changes Central PlanningBasic needs met Consumers Wants Ignored

Everyone know role No incentives to work Massive Bureaucracy Day to Day

Inflexibility

The Soviet Economy What is the reason why people didn’t

work hard?

Circle the words that fit with Command EconomiesLots of Choices government housingEconomic freedom Karl Marx Merit Pay Joseph Stalin CubaIncentives to work Basic needs metGet what you need Slow to changeNo Technology Equal distribution of WealthHappy Consumers Government controlPrivate Property Fast to changeDay to day flexibility Central PlanningNorth Korea Tribes Adam Smith

Expansion of Communism

COMMAND

Market Economy: Capitalism

USA, Japan, UK, South Korea, South Africa, Canada

The Entrepreneur The Government The Consumer

“The Spark plug of the economy”-risk takers-innovators-they organize the 4 factors of production

Protector of consumers rights and freedom, private propertyProvider of services like national defense, welfare, education, public goodsConsumer of resources 2nd largest only to citizensRegulator of markets to ensure competition and safety, redistribute income, limit market failuresPromoter of National Goals

Consumer Sovereignty- rulers of the market-Answer the 3 basic questions

KNOW YOUR ROLES!!!!!!!!!!!!!!!!!!!!

Mixed Economy

Modified Private Enterprise Economy

CONSUMER SOVEREIGNTYWE RUN THIS ECONOMY!!!!!!!!!!!!

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 interestStrengths WeaknessFlexible Slow to changeIndividual Freedom Allows Failure

Winners/losersDecentralized decision makingLarge Variety of ProductsHigh consumer SatisfactionPrivate Property Rights

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

Stop, Collaborate and Listen

What are the similarities and differences of market and Command Economies?

CommandMarket

What would a mix of command and market look like?

-Socialism is a blend of communism and capitalism.

-The 3 Basic Economic Questions are answered by the government and individuals

-The government owns and controls only key resources and industries while individuals own the rest of the resources and have private control of most businesses

-Basic needs of the people are met by the government-People pay high taxes to fund things like healthcare, insurance, and other social servicesLimited -Economic Freedom -Voluntary Exchange -Profit Motive -Private Property Rights-There is a shared control of the economy between the government and people.

LETS MIX THINGS UP WITH SOCIALISM!!!!!!

China, Vietnam, Sweden, Venezuela

FILL IN THE BLANKS

Economic System

Private Ownership of resources

Profit Motive

Consumer Sovereignty

Competition

Government Regulation

redistribution of Wealth

Traditional

Market/ Capitalism

Command/Communism

Socialism

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

Warm- UP - Review

Describe what each of the following would look like in a traditional, command, and market economy

What do you produce?

How do you produce?

For whom?