Introduction to Business & Marketing Mixed Economies Introduction to Business & Marketing

Quick Review! What are the three basic economic questions? What goods and services should be produced? How should those goods and services be produced? For whom should the goods and services be produced?

Quick Review! What do they tell us about a nation’s economy? The economic questions define the nation’s economic system.

Quick Review! Traditional Economies Market Economies Command Economies List the three types of economic systems. Traditional Economies Market Economies Command Economies

Task #42 Compare the American economic system to other economic systems.

Mixed Economies No economy is purely any one economic system. Mixed economies have industries that are either operated or regulated by the government. They also have individually owned enterprises. Example: The U.S.A. is a mixed economy with strong characteristics of a market economy. Government has some involvement in business. Government influence is limited by laws and regulations.

Types of Mixed Economies Nations in the world today typically represent one of three mixed economies. Capitalism Socialism Communism

Individual Competition Activity Link: http://oregonteacherblog.chalkboardproject.org/teaching-strategies/rock-paper-scissors-how-not-to-bore-your-students-with-a-lecture-on-communism-socialism-and-capitalism/ Distribute Hershey kisses. Each student gets 3 pieces of candy, except for three students who should receive up to 6 pieces. Listen for “that’s not fair” and “why do they get more?” complaints. Students compete in Rock Paper Scissors with the requirement that each loss costs a piece of candy to be given to the winner. If a student runs out of candy, s/he should sit and watch. Continue until only a few students have any candy left. Stop the game – discussion. How did you feel at the start of the game? How did you feel when you ran out of candy and had to sit down? What tactics could you have used to get back into the game? (Steal, bargain, buy off someone, lie) Is the game fair? What could the teacher do to make the game more fair – should s/he do it? Take note of responses. Discuss capitalism Individual Competition

Rock, Paper, Scissors Select a player to compete against. On “3”, each player turns his/her first into one of rock, paper or scissors. The rules: Rock beats scissors Scissors beats paper Paper beats rock The winner takes one piece of candy from the loser. You may compete as long as you have a piece of candy. If you run out of candy, you must return to your seat. Activity Link: http://oregonteacherblog.chalkboardproject.org/teaching-strategies/rock-paper-scissors-how-not-to-bore-your-students-with-a-lecture-on-communism-socialism-and-capitalism/ Distribute Hershey kisses. Each student gets 3 pieces of candy, except for three students who should receive up to 6 pieces. Listen for “that’s not fair” and “why do they get more?” complaints. Students compete in Rock Paper Scissors with the requirement that each loss costs a piece of candy to be given to the winner. If a student runs out of candy, s/he should sit and watch. Continue until only a few students have any candy left. Stop the game – discussion. How did you feel at the start of the game? How did you feel when you ran out of candy and had to sit down? What tactics could you have used to get back into the game? (Steal, bargain, buy off someone, lie) Is the game fair? What could the teacher do to make the game more fair – should s/he do it? Take note of responses. Discuss capitalism

Capitalism Characterized by: Role of Government Private Ownership Freedom of Competition Results in Unequal Classes Role of Government Support the people Take care of those who cannot care for themselves Private Ownership: students started with their own candy Freedom of Competition: students played rock, paper, scissors Results: some students won, most lost everything The class struggle was played out in the students’ complaints (the workers’ revolt) through their responses about how they could have gotten back into the game and arguments about the game’s fairness.

Think About It… Capitalism is characterized by private ownership & competition without government interference. What is an example of two companies that compete against each other? Our government also provides support… What are some of our government-regulated industries? Agriculture (USDA) Pharmaceuticals (FDA) Health Care (ACA)

Government Regulation! Announce that it’s time to pay taxes. Anyone with more than five pieces must pay the government 2 pieces of candy. Anyone with more than ten pieces must pay 3. Use collected candy to give everyone in the class at least one piece. Government Regulation! How do you feel now? Is it fair?

Socialism Characterized by: Role of Government: Government Ownership of Key Industries Goal of Social Equality Results in Higher Taxes Role of Government: Access to Social Services ensure standard of living Government Ownership: teacher collects candy (charges taxes) Goal for Social Equality: each student has at least one Social services – ensure a good standard of living Taxes – help finance government services Key industries – telecommunications, natural resources, transportation, banking Examples: Canada, Germany, Sweden

Who wants to play again? Why not? Ask who wants to play again – probably only a few brave students will raise their hands. Collect all the candy, then redistribute evenly (3 pieces) to each student. Discuss the concept of communism. Who wants to play again? Why not?

Communism Goal of Economic Equality Results in Class-less Society Everyone works & shares Results in Class-less Society Some refuse to work All share resources No supervision required Nothing to drive people to better themselves or work hard In reality, there is nothing to drive people to better themselves or to work hard.

Communism Today Characterized by government control Role of Government Provide for the needs of all individuals Protect society’s interests Ex: North Korea, Cuba, China Examples: North Korea, Cuba, China

Comparing Mixed Economies Capitalism Communism Socialism Comparing Mixed Economies What do all three mixed economies have in common? Role of Government is to Support People What is the primary difference between each economy? Ownership of Resources Level of Control

Task #39 Identify characteristics of Free Enterprise.

The United States of America Our capitalist economy operates according to the principles of free enterprise.

What is Free Enterprise? Free enterprise is driven by the concept of supply & demand. Free enterprise is characterized by: Competition Freedom of Choice Private Enterprise Profit Motive Competition – rivalry exists among businesses to sell their goods & services Freedom of Choice – individuals make decisions about production and distribution Private Enterprise – private ownership of economic resources Profit Motive – individuals invest money and time to satisfy consumers’ wants

I, Pencil An Essay by Leonard E. Read (1958) What might cause the process to change? Is there a “master mind” driving the creation of pencils? Why do people all over the world voluntarily make the parts of a pencil? For what are they trading hours of labor? I, Pencil An Essay by Leonard E. Read (1958)

Think About It… In Your Notes At Your Table Describe the factors of production required to make a pencil. Natural Human Capital What might cause the pencil-making process to change? Is there a “master mind” driving the creation of a pencil?

Leave all creative energies uninhibited. I, Pencil, am a complex combination of miracles: a tree, zinc, copper, graphite and so on. But to these miracles which manifest themselves in Nature an even more extraordinary miracle has been added: the configuration of creative human energies--millions of tiny know-hows configurating naturally and spontaneously in response to human necessity and desire and in the absence of any human masterminding! Leave all creative energies uninhibited. There's no limit to what we can accomplish. - Leonard E. Read Configurating – to give a form or design to