SSEF4 The student will compare and contrast different economic systems and explain how they answer the three basic economic questions of what to produce, how to produce, and for whom to produce. a. COMPARE command, market, and mixed economic systems with regard to private ownership, profit motive, consumer sovereignty, competition, and government regulation. 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.

Work Sessions!

ACTIVITY CREATE A COMPARE & CONTRAST CHART OF THE DIFFERENT ECONOMIES IDENTIFYING THE COMPONENTS IN THE STANDARD.

Students must be able to CREATE and EXPLAIN the workings or activities surrounding the CIRCULAR FLOW CHARTS of a mixed and free market economy & explain how the “Three Economic Questions” are answered in the circular flow chart.

How Does Society Answer The Three Economic Questions? Why does society ask these questions? All resources are limited. –Society must determine… What goods & services should be produced? How should these goods & services be produced? Who consumes these goods & services? Why does society ask these questions? All resources are limited. –Society must determine… What goods & services should be produced? How should these goods & services be produced? Who consumes these goods & services?

What Goals Are Societies Trying To Accomplish? –Economic Efficiency – society always try to maximize what they can get for the resources they have to work with. –Economic Freedom –The opportunity to make our own choices. Sometimes economic freedom is limited by the economic system. What Goals Are Societies Trying To Accomplish? –Economic Efficiency – society always try to maximize what they can get for the resources they have to work with. –Economic Freedom –The opportunity to make our own choices. Sometimes economic freedom is limited by the economic system.

What Goals Are They Trying To Accomplish? –Economic Security & Predictability – people want to know that they can survive in times of uncertainty. Therefore some economic systems provide SAFETY NETS. What Goals Are They Trying To Accomplish? –Economic Security & Predictability – people want to know that they can survive in times of uncertainty. Therefore some economic systems provide SAFETY NETS.

What Goals Are They Trying To Accomplish? –Economic Equity – What is the best way to divide the economic pie? Should everyone get the same? Should one’s consumption depend on his or her production? How much should society provide for those who are unable or unwilling to produce? What Goals Are They Trying To Accomplish? –Economic Equity – What is the best way to divide the economic pie? Should everyone get the same? Should one’s consumption depend on his or her production? How much should society provide for those who are unable or unwilling to produce?

What Goals Are They Trying To Accomplish? –Economic Growth & Innovation – a nation’s economy must grow in order to improve its standard of living. Innovation in technology increase the efficiency of production and usher in new goods & services. –Societal Goals – health care, strong national defense, full employment, etc. What Goals Are They Trying To Accomplish? –Economic Growth & Innovation – a nation’s economy must grow in order to improve its standard of living. Innovation in technology increase the efficiency of production and usher in new goods & services. –Societal Goals – health care, strong national defense, full employment, etc.

The Economic Goals of a Society are Met Through The Type of economic System It Uses. –Market Economy – a system in which decisions on production & consumption of goods & services are based on voluntary exchange in markets. –Command (Centrally Planned) Economy – an economic system in which the central government or a central authority makes all the decisions on the production & consumption of goods & services.

The Economic Goals of a Society are Met Through The Type of economic System It Uses. –Mixed or Modern Economy – Mixed economy is based on the free market system with limited government involvement. The government provides regulations to protect consumers. The government overcomes “market failures.”

How Does Society Answer The Three Economic Questions? By the economic system it uses Write your answer quickly on a piece of paper The economic system determines what, how, & whom.