Unit 1-chapter 2 Economic Systems How does a society decide the ways to use scarce resources to meet unlimited wants?

Economic Systems How important is it to feel you have choice in your life? What choices do you have available to you? When are you denied choice? What is the reason for the denial?

Take some time… Use the book and complete the graphic organizer about the different types of economic systems. Market Traditional Command How do they answer the 3 economic questions How do they answer the 3 economic questions How do they answer the 3 economic questions

Traditional Economy In your opinion, what is the greatest advantage of a traditional economy? What, if anything, do developed nations owe developing nations as globalization reaches traditional economies?

Lights of the world at night

Command Economies Imagine that you live in a centrally planned economy. What will you everyday life be like? Why is government ownership of the means of production necessary to achieve communist goals? How are the goals of socialism met by allowing both government ownership and private ownership of resources?

Pillars or Fundamentals Link to visuals pptx

Productive Resources Human resources People: the mental and physical abilities that allow them to make contributions in the workforce. Examples: construction workers, factory workers, teachers, doctors, truck drivers, farmers, secretaries, actors, engineers, garbage collectors, and many other occupations

Productive Resources Capital resources Goods that were specifically produced in order to produce other goods. Examples: machines, equipment, tools, office and factory buildings, tractors, assembly lines, computers, grinders, trucks, and many other things that help in the production process

Productive Resources Natural resources An actual or potential form of wealth extracted or harvested from the natural environment. Examples: trees, fish, soil, minerals (such as copper, aluminum, iron ore, gold, and zinc), air, water, fossil fuels (such as coal, oil, and natural gas), as well as the space provided by a plot of land

A Description of Production Natural resources are transformed by human and capital resources into goods and services. Thus, human and capital resources do the work of production, while natural resources provide the material that they transform. Because human and capital resources require energy to work, natural resources also provide the energy required for these resources (i.e., food for workers and fuel for machines).

The Circular Flows in a Market Economy

The Circular Flows in a Market Economy with Government

Today’s mixed economies How is government involvement evident in your lives? Does the US have a pure market economy? As a class, brainstorm a list of countries and place them on a spectrum going from command to mixed to market.

Today’s mixed economies In your opinion, are there some goods/services that should be publicly owned? Why? In what ways have your personal global ties increased in the last 10 years?

Government and free market Public goods—provided by government and consumed by public as a group—people can not be excluded and one person’s use does not reduce it’s usefulness to others Privatize vs Nationalize

Infrastructure: All goods & services necessary for the functioning of society.

Market Failure: When people who are not part of a marketplace interaction benefit from it or pay its costs Free Rider: A person who chooses not to pay for a good or service but still benefits from it

Externality: A side effect of a transaction that affects someone other than the seller or buyer. Negative Positive

Subsidies: Government payment that helps cover the cost of an economic activity that has the potential to benefit the public as a whole. (Encourages Positive Externalities)