Learning Objective: Today I will be able to compare the advantages and disadvantages of different economic systems by creating a matrix chart. Agenda Learning.

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Learning Objective: Today I will be able to compare the advantages and disadvantages of different economic systems by creating a matrix chart. Agenda Learning Objective Lecture: Ch. 2.1 Economic Systems Matrix Chart Vocabulary Exit Slip

Title Notes: Ch. 2.1 Economic Systems Pure Market Pure Centrally Planned Mixed Market Define each of these concepts (as part of your Ch. 2 Vocabulary). 6 min. Pg. 34-40

Economic system: mechanism or institutions that resolves the what, how, & whom question. What goods & services will be produced? How will they be produced? For whom will they be produced?

Pure Market Private firm (business) that controls all production. Government does not get involved. Also known as laissez-faire. Advantages: No gov. restrictions No paying taxes High profits for CEO’s & business owners. Voluntary choices to buy & supply: invisible hand

Disadvantages: Difficult to enforce property rights, contracts, or rules of the game No min. wage/ income not guaranteed Monopolies: one corporation owns all companies. No Public Goods or Services No parks or army, cause neither is profitable. Externalities=cost outside of market transaction Damages on environment not penalized by gov. https://www.youtube.com/watch?v=8UBk8f7Bgj0

Pure Centrally Planned Economy Government controlled & owns all resources used production. (communism) (visible hand) Advantages: Equal distribution of resources to the people Ration living spaces & food. Equal pay & no poor or rich No such thing as the top 1% Free health care & education (college) People own & control economy Communal ownership of all resources

Disadvantages: Consumers get low priority Little freedom of choice Food shortages & scarcity Little freedom of choice Consumers can’t demand consumer goods or complain to customer service. Inefficient production Gov. sets supply goals, which could be inefficient: not enough or too much Resources wasted All resources belong to gov., people do not care to about preserving gov. property Environmental damage unenforced.

Mixed Economy Advantages: Disadvantages: Public goods (from taxes) Ex. Park, library, school, etc. Workers rights protected & Unions Wages & benefits are protected Competition: compare prices for the cheaper price Black Friday of course!!! Disadvantages: Competition: resources are scarce Not all have equal opportunities Paying taxes

Mixed Economies=Market Economies Competitive market with mix of central (gov.) control. Transitional market: Central (gov. controlled market) changing into  competitive markets

Pure Market = Laissez-Faire (no gov.) Pure Centrally Planned = Communism (gov. control) Mixed Economy = Capitalism (some gov. control)

Pure Centrally Planned Instructions: Get an extra sheet of paper and draw this chart. Next, write the biggest advantage & disadvantage for each economic system in each designated box. Economies Advantages Disadvantages Pure Market Pure Centrally Planned Mixed/Market

Exit Slip Which type of economy do you prefer? Explain why you prefer that type of economy? The economy I prefer is____________________ because_______________________________.