Lesson 1.8 Economic Systems SSEF4 a. Compare command, market, and mixed economic systems with regard to private ownership, profit motive, consumer sovereignty, competition, and government regulation. SSEF4 b. Evaluate how well each type of system answers the three economic questions and meets the broad social and economic goals of freedom, security, equity, growth, efficiency, and stability.

Lets do a quick review… 1. An assembly line can increase a factory’s productivity because it allows workers to A. diversify their skills B. focus on a specific task C. put in overtime hours on the job D. use a wide range of knowledge 1B, 2, B

And one more… 2. Alex and Dylan mow and trim lawns. Currently, each man mows and trims a lawn by himself, but the process takes a long time. They would MOST likely improve their efficiency if A. Alex and Dylan mow a lawn and then trim it together B. Alex mows a lawn while Dylan trims the same lawn C. Alex trims Dylan’s lawn while Dylan trims Alex’s lawn D. Alex and Dylan reduce the number of lawns they mow and trim

Lets learn something new. Follow along the Cloze notes for this section

Essential Question: What are the 3 Fundamental Questions of Economics Essential Question: What are the 3 Fundamental Questions of Economics? How do the 3 main economic systems answer them?  Words to Know: Mixed Economy, Laissez-faire, and Equity   Fundamental Questions of Economics What do we produce? How do we produce? For whom to produce? Command Economy - The government owns and controls all resources. Market Economy - Private individuals own and control all resources

Essential Question: What are the 3 Fundamental Questions of Economics Essential Question: What are the 3 Fundamental Questions of Economics? How do the 3 main economic systems answer them? Command Economy Strengths Production can change quickly. Government provides equity (output is equally distributed among citizens). Weaknesses No variety or incentives. Massive, oppressive government. Heavy government planning leads to shortages. Example: North Korea

Essential Question: What are the 3 Fundamental Questions of Economics Essential Question: What are the 3 Fundamental Questions of Economics? How do the 3 main economic systems answer them? Market Economy Strengths Changes with the times. Strong belief in laissez-faire (economy idea created where the government has little to no role in the economy). Weaknesses Only rewards those who are productive. Vulnerable to market crashes. Example: U.S. before 1930

Essential Question: What are the 3 Fundamental Questions of Economics Essential Question: What are the 3 Fundamental Questions of Economics? How do the 3 main economic systems answer them? Mixed Economy In recent years, Command Economies and Market Economies have taken on a mixture of both. Private individuals control most resources while the government controls only important ones (like transportation and healthcare). Examples: The U.S. and China.

Venn Diagram Activity Mixed Pure market Centrally planned With a group (3-4) create a 3-pronged Venn Diagram of the 3 Economic Systems For each system, describe how private ownership, profit motive, consumer sovereignty, competition, and government regulation work (or affected by) in these systems Additionally, evaluate how well each type of system answers the three economic questions and meets the broad social and economic goals of freedom, security, equity, growth, efficiency, and stability. Be sure to include all points!!!