-TSW understand the different major economic systems. (Standard 2) Objectives: -TSW understand the different major economic systems. (Standard 2) -TSW compare the different major economic systems in terms of their strengths and weaknesses. (Standard 2) -TSW understand how values and beliefs influence economic decisions in different societies. (Standard 1)

Three Types of Economies 1. Traditional Economy-- a society where decisions are made according to habit, custom, tradition. Ex. Polar Eskimos (Inuit)

Disadvantages: Advantages: -Everyone has a role. -Keeps community life stable and continuous Disadvantages: -Tends to discourage new ideas -May punish rule breakers -People not free to make decisions -They know what will be produced.(same)

The main goal of a traditional economy is survival.

Censored

society where most economic decisions are made by a central authority. 2. Command Economy-- society where most economic decisions are made by a central authority. Ex. North Korea, China Shifts resources to whatever government decides.

Advantages: Disadvantages: -Can change drastically within a short period of time. Ex: Soviet Union from an agricultural nation to an industrial one . Disadvantages: -Does not always meet the wants and needs of the people. -No profit motive -Little opportunity for advancement

The main goal of a Command Economy is the good of the state.

Economic system where supply demand, and price determine 3. Market Economy-- Economic system where supply demand, and price determine what will be produced. Ex. The United States’ capitalistic system

Advantages: -Competition -Freedom -Variety -Lack of Government Intervention -Decision making process is decentralized. -Producers trying to lower costs of production and improve quality.

Disadvantages: -Rewards only the productive -Some could not survive without government help or charity.

The main goal of a market economy is to make money.

Tradition Command Market Exit Ticket Tradition Command Market Adolf Hitler built a great army in a short period of time just by redirecting the resources into defense industries and military. The Sami of northern Norway, Sweden and Finland destroyed their way of life based on reindeer herding when they introduced snowmobiles into the environment. 3. A good idea can make you a millionaire!

If GCHS was a one of the three types of economies discussed, which one would it be? Why?

The Four Basic Questions **Every nation’s economic system must answer 4 basic questions. The values and goals of a society will determine how these questions are answered.

1. What goods and services will be produced and how much? 2. Who should produce them? 3. How should they be produced? 4. Who should share in their use?

Factors Affecting Income 1. Talent 2. Personal Preference 3. Demand 4. Opportunity