Teacher Page

BORDERS AND POWER PRESENTATION

This presentation is shorter than some others by design. This section will take a lot more time on the teachers part explaining and using examples. Students need to see a lot of practial application of these terms, use their real life as examples to help them understand wherever possible.

•Topic A – What is Economics?

•Topic B – Types of Economics

Activity 17:1 – Classify Economies

Activity 17:2 – Economic Systems Quiz

Activity 17:3 – M&M Economics

Activity 17:4 – Shoe Factory Economics

Activity 17:5 – Traditional vs. Industrial Economies

Activity 17:6 – Two Cows Economics

Overall Objective: Students will understand the processes that influence political divisions, relationships and policies.

Jarrett Book: Chapter 17 (276 – 291)

Essential Questions

How do different societies around the world meet their

economic need?

What are the advantages and disadvantages of each economic

system?

Important Ideas•Economics is a study of how people meet their basic needs.

•All societies must answer three questions:

What should be produced?

How should it be produced?

Who gets what is produced?

•The answers to these questions determine its type of economic system.

•Specific countries can be classified by the type of economy they have.

What is economics? Lets go with this definition:

“Economics is the study of how individuals, businesses, and nations make things, buy things, spend money, and save money.”

Can you think of one word or maybe a phrase that

simplifies this definition? If not, can you at least

make it easier to understand? Give it a try!

The Problem of Scarcity

•Economics involves a lot of math, but it also depends a lot on human behavior. It is hard to predict what people will do with their money.

•Scarcity is an economic problem. When something is scarce, we do not have enough of it.

•Since people always want new and different things, it will be impossible for a society to make enough to always fill every need. Therefore, scarcity will always be an economic concern.

I want a cell

phone

3 Years ago

I want an

Iphone 4

1 Year ago

I want an

Ipad

This Year

We will always want the next thing!

Goods Things people make.

This could be a factory or in some

sort of cottage industry

Things that people do for others.

Services

Lets say you had ten billion dollars? Do you think you could end the problem of scarcity in the world? Why or why not?

Lets make sure you know a few key terms before we go any further:

Economics boils down to three basic questions:

The answers to these questions determines the economic system

Traditional Economy

Free Enterprise

Communist System

Socialist System

What should be produced?

Who should get it?

How should it be

produced?

Traditional Economy

Custom and Tradition

determine what will be produced.

People are free to take part in any

legal business, buy or sell any legal

product.

Often there is no private property; things are often

owned by a family or village in common.

The production of goods is based on custom and time

honored methods; new ideas are often

discouraged.

So how does this look?

Subsistence Agriculture

The people in traditional economies usually only grow enough food to feed their family or village. Any animals they keep are used in the same way, gathering milk and eggs as a source of food. Many people use subsistence

fishing as a means of support as well.

Amcaja, Creative Commons 3.0. July 2005.

Subsistence Fishing in Sri Lanka (Near India)

Subsistence Farming in Sub-Saharan Africa

So how does this look?

Cottage Industry

In traditional economies, people often create handmade products such as clothes, furniture or other products that

can be sold or traded to help sustain their families or village. During times of the year where crops are not

plentiful, this can help a family survive.

Today, there are very few traditional economies left in the world. However, there are individual families or small groups, even in the United States, that practice that way of life.

Berber Tribe in Algeria Bush People of the Kalahari Desert

Hunters in Tanzania Most cultural groups that practice traditional economies do so by choice. Though it may seem

foreign to us, it is the oldest type of economy in the world.

Free Enterprise System

People have the right to own private

property with limited government

interference

Goods and Services are produced to

meet the needs of the members of the

family or tribe.

The ability to make profits is what

drives people to risk their money in starting new

business.

The interaction of supply and demand determines prices in

a free market economy .

So how does this look?

Commercial Agriculture and Industry

Unlike cottage industries or subsistence farming, commercial businesses are designed

to generate profit. Technology in every industry, including agriculture, is developed in

response to this need for profit.

Hinrich. Creative Commons 2.0. September 2008.

Most every major democracy in the world practices some form of the free enterprise system. People

often call it capitalism. Most of the stronger economies in the world promote the free enterprise system (US, Great Britain, France, Chile, Canada,

Japan, Germany, Singapore, etc.).

The interaction of supply and demand determines prices in a free market economy .

Democracy

Communism

All major decisions on production,

distribution and the use of resources are

made by the government.

Private property is abolished; national ownership of the all

land, factories, farms, and major

resources.

Communism is based on

cooperation; all workers should join together and share

equality.

The goal is to achieve a classless society – equality

among all workers.

So how does this look?

Communist Factory

A factory in a communist system would often make one item which would be the same for everyone. Typically, the government might decide which car

everyone would drive, what kind of clothes they might wear, etc. All industrial decisions were made to be what was “best for the people”. All factories had

controls put on them from the government.

The Zaz

The most well known communist government in history was the Soviet Union. This was a group of countries, including Russia, that formed together to be the largest in the world. The government of Soviet Union collapsed in 1989, and today Russia and the other countries abandoned communism for a more free system. Today, China, North Korea, Cuba and Vietnam all maintain communist systems, but many of those governments, especially China, have allowed some economic freedom within their society.

Socialism

The government should end poverty by taking control of the

nation’s resources and providing public

services.

The government makes decisions

about production, distribution, and use of resources Other decisions are made

privately.

Major industry is owned by the

government. Other property is held

privately.

Socialism seeks a fair distribution of income. People’s basic needs are

made for free or at very low cost.

So how does this look?

Socialism is very similar to communism in many of its philosophies, but socialism

promotes private ownership of small businesses. A small

factory could be owned by an individual, but a large industry that is essential such as banks,

airlines, mines, etc. must be controlled by the government,

which would provide the people with the services they

needed to survive.

Government Owned Large Factory

Privately Owned Small Factory

Sweden and Israel base there economies on the idea of socialism, but they do have

elements of free enterprise as well. Many countries throughout Europe have socialist

elements, but they have began to move toward more private ownership over time.

No country or region of the world practices one single type of economy.

Depending upon a lot of different factors, each country blends these

different economic systems together.

If a country is ruled by a totalitarian government

system what type of economy are they likely

to have?

If a country has a democratic government

system what type of economy are they likely

to have?

QUICK REVIEW!