Write 3 things that you know about the word

1
On the Index Card

1. Write 3 things that you know about the word
   Economy
2. Write 2 things that you know about the word
   System
3. Write 1 thing that you know about the word
   Resources

2
Economic Systems

• SS6E5 The student will analyze different
  economic systems.
• Compare different types of economic systems
  traditional, market, command and mixed.1 what
  to produce, 2 how to produce, and 3- for whom
  to produce.
• b. Explain how most countries have a mixed
  economy located on a continuum between pure and
  market and pure command.
• c. Compare the basic types of economic systems
  found in United Kingdom, Germany, and Russia.

3
Essential Question

• Write down this Essential Question
• How do traditional, command, and market economies
  answer the economic questions of what to produce,
  how to produce, and for whom to produce?

4
What is Economics?

• Economics Studies the choices of people trying
  to satisfy their wants in a world of scarcity

Technology
Land
Oil fuel
Doctors
5
What are some things you want that are scarce?
6
Economic Questions

• Economic Systems determine three questions
• WHAT goods will be produced?
• HOW will the goods be produced?
• FOR whom will the goods be produced?
• The way a society answers these questions
  determines the economic system

7
What is an ECONOMIC SYSTEM?

• The way a society answers WHAT goods will be
  produced, HOW will the goods be produced, and FOR
  whom will the goods be produced

8
Economic Systems determine three questions

• WHAT TO PRODUCE? (What kinds of goods and
  services should be produced?)
• HOW TO PRODUCE? (What productive resources are
  used to produce goods and services?)
• FOR WHOM TO PRODUCE? (Who gets to have the goods
  and services?

9
Influences of Economy Growth

• Economic Resources
• Natural Resources raw materials found in nature
  that are used to produce goods
• What are examples of some NATURAL RESOURCES?
• Human Resources peoples knowledge, efforts,
  and skills used in their work
• What are examples of some HUMAN RESOURCES?

10
Influences of Economy Growth

• Economic Resources
• Capital Resources used to produce goods and
  services (buildings, materials, and equipment)
• What are examples of some CAPTIAL RESOURCES?
• Entrepreneurial Resources - recognize the need
  for new goods or service
• What are examples of some ENTREPRENEURIAL
  RESOURCES?
• Scarcity shortage of resources

11
Why Economic Systems?

• Nations use economic systems to determine how to
  use their limited resources effectively.
• Primary goal of an economic system is to provide
  people with a minimum standard of living, or
  quality of life.

12
3 Basic types of Economic Systems

• 1. Traditional Economy
• 2. Market Economy (free enterprise)
• 3. Command Economy
• Mixed Economy - not considered an economy by
  itself just a blending of two different types of
  systems

13
Traditional Economy The Old Way!

• Found in rural, under-developed countries
• Inuits of Canada
• Pygmies of Congo
• Eskimos Indian tribes
• Belarus

14
Traditional Economy

• Who decides what to produce?
• People follow their customs and make what their
  ancestors made
• Who decides how to produce goods services?
• People grow make things the same way that their
  ancestors did
• Who are the goods services produced for?
• People in the village who need them

15
Traditional Economy The Old Way!

• Advantages people have specific roles security
  in the way things are done

• Disadvantages Technology is not used difficult
  to improve

People will make what they always made will do
the same work their parents did
16
Market Economy (Free Enterprise) The Get Rich
Way!

• Who decides what to produce?
• Businesses base decisions on supply and demand
  and free enterprise (PRICE)
• Who decides how to produce goods and services?
• Businesses decide how to produce goods
• Who are the goods and services produced for?
• consumers

17
Market Economy (Free Enterprise) The Get Rich
Way!

• Also called a Free Market Economy or Free
  Enterprise Economy
• Businesses and consumers decide what they will
  produce and purchase and in what quantities

• Decisions are made according to law of supply
  demand
• Supply and demand of goods and services determine
  what is produced and the price that will be
  charged.

18
Market Economy (Free Enterprise) The Get Rich
Way!

• Advantagecompetition to have the best products
  and services

• Disadvantagehuge rift between wealthy and poor

There are no truly pure Market economies, but the
United States is close.
19
Command Economy The Government Way!

• Who decides what to produce?
• Government (central authority) makes all economic
  decisions
• Who decides how to produce goods and services?
• Government decides how to make goods/services
• Who are the goods and services produced for?
• Whoever the government decides to give them to

20
Command Economy The Government Way!
Two types

• Strong Command where government makes all
  decisions (communism China, Cuba)

• Moderate Command where some form of private
  enterprise exists but the state owns major
  resources (socialism France and Sweden)

This system has not been very successful. More
and more countries are abandoning it.
21
Command Economy The Government Way!

• Governmental planning groups determine such
  things as the prices of goods and services as
  well as the wages of workers

22
Command Economy The Government Way!

• Advantages
• Guarantees equal standard of living for everyone
• Less crime and poverty
• Needs are provided for through the government

• Disadvantages
• Minimal choices
• Fewer choices of items
• No incentive to produce better product or engage
  in entrepreneurship
• Also known as a Planned or Managed Economy

23
Mixed Economy The Combined Way!

• Combination of a market and a command economy
• Most nations have a mixed economy United States,
  England, Australia

• Government takes care of peoples needs
• Marketplace takes care of peoples wants

24
Mixed Economy The Combined Way!

• Advantagebalance of needs and wants met by
  government and in marketplace

• Disadvantagecitizens have to pay taxes

25
Economic Continuum

• A line going from one extreme to the other
  extreme.
• is based on how much of the economic system is
  market vs command.
• The higher the percentage more economic freedom
  and the lower the percentage less economic
  freedom
• Where are countries on the economic continuum?
• 
  U.K
• 
  Germany 79
• 
  71
• Russia
• O
  51
  100
• PURE ____________________________________________
  __ PURE
• COMMAND
  
  MARKET

• Cuba
• 28

Canada 81

• Brazil
• 57

26
Economic Continuum

• A line going from one extreme to the other
  extreme.
• is based on how much of the economic system is
  market vs command.
• The higher the percentage more economic freedom
  and the lower the percentage less economic
  freedom
• Where are countries on the economic continuum?
• 
  U.K
• 
  Germany 79
• 
  71
• Russia
• O
  51
  100
• PURE ____________________________________________
  __ PURE
• COMMAND
  
  MARKET

• Cuba
• 28

Canada 81

• Brazil
• 57

27
(No Transcript)
28
Ticket Out the Door

• Index Card
• NAME!!
• 3- Basic Types of Economies
• 2- Examples of Mixed Economy
• 1-Define Economics