PUBLIC SECTOR. PUBLIC SECTOR V PRIVATE SECTOR Public sector: Public sector: everything that is... owned by the g____ for the benefit of all c____. Private.

Slides:



Advertisements
Similar presentations
Standards/Elements SSEF4 The student will compare and contrast different economic systems and explain how they answer the three basic economic questions.
Advertisements

“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.” 1.Do.
Public Goods Goods/services which are not produced at all through the price mechanism because they exhibit: - non-rivalry in consumption (one person consuming.
Public Goods Lecture 11 – academic year 2014/15 Introduction to Economics Fabio Landini.
Socialism and Communism. Differences between Capitalism and Socialism In capitalism goods and services are distributed by private businesses People are.
Capitalism vs. Communism
TYPES OF ECONOMIES. WHO AND WHY?  Who makes economic decisions?  Who owns resources?  Who provides goods and services?  Why?
Economic Systems.
Chapter 5 the free enterprise system Section 5.1
HW RB, p.14/VI 1 economic2 economic 3 economy4 economic 5 economical6 economic 7 economy8 economics 9 economical10 economy 11 economical12 economy 13 Economics15.
What’s an economic system?
Market Failure.
Making and talking slides → RB, p 89 I Compare IIOrganize the first slide for the talk on p 86 III Study and do p 90 (graphics) HW: Draft slides for the.
The American Free Enterprise System
ENTREPRENEURS IN A MARKET ECONOMY
Chapter 19.3 Capitalism and Free Enterprise. Features of Capitalism The U.S. economy is built on capitalism and free enterprise. Capitalism is an economic.
American Free Enterprise
Economic Resources And Systems
The economy of the United States is built largely on free markets and private ownership Capitalism is an economic system in which private citizens own.
Capitalism and Free Enterprise
Revision. Course material in the 1st Progress test ( TOPICS & Skills ) University Essentials - RB Economics and Economy – RB Types of Economies – RB &
Economic Systems Government's view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And.
Market Failure.
In this chapter, look for the answers to these questions:
1 Chapter 5 Difficult Cases for the Market and the Role of Government.
Market Failure. Market failure has become an increasingly important topic for students.There is a clear economic case for government intervention in markets.
Economic Systems An economic system is how a country answers the Three Basic Economic Questions.
PUBLIC SECTOR. PUBLIC SECTOR V PRIVATE SECTOR Public sector: Public sector: everything that is... owned by the g____ for the benefit of all c____. Private.
 There are many different types of producers in our economy. We can classify them as either private or public producers.
Types of economies. HW check: RB, p 59 1 pie chart 2 bar chart 3 plan 4 flow chart 5 line chart 6 drawing / illustration 7 table 8 diagram.
Chapter 2 Economic Resources and Systems. Factors of Production  Just as individuals have to deal with a shortage of resources, so do societies  A society.
Economic activities & sectors Find the odd one out and explain your choice: shipbuilding – agriculture - engineering – industry law – construction – information.
ECONOMIC SYSTEMS OF GOVERNMENT CAPITALISM, SOCIALISM, AND COMMUNISM (OBJ.7)
Headlines Part III Economics 230 J. F. O’Connor. Part II Recap Concerned with the workings of a perfectly competitive market economy with private ownership.
ECONOMIC SYSTEMS. What is an Economic System? Economic system – how a country decides to create, buy and sell products & resources 3 Basic Questions to.
Unit (4) -The public sector is made up of organization which accountable to central or local government. -They are funded by government. -They tend to.
Economic Systems and Decision Making. Objective Understand the different major economic systems.
TYPES OF ECONOMIES. WHO AND WHY?  Who makes economic decisions?  Who owns resources?  Who provides goods and services?  Why?
Chapter 3 Review Free Enterprise Economics. 1 In a free enterprise economy, how is the following question answered. What goods will be produced? Producers.
Scarcity Means There Is Not Enough For Everyone Government must step in to help allocate (distribute) resources 1.
In this chapter, look for the answers to these questions:
Markets, Maximizers and Efficiency
Economic Questions, Freedoms, & Social Goals.  Lived in Scotland from  Wrote The Wealth of Nations  Believed in Laissez Faire Economics 
Back to Table of Contents pp Chapter 2 Economic Resources and Systems.
REVISION. Answer the following questions: 1. According to John Kenneth Galbraith, which activities are as important as the production of goods? 2. What.
TYPES OF ECONOMIES. WHO AND WHY?  Who makes economic decisions?  Who owns resources?  Who provides goods and services?  Why?
T ypes of economies. ALLOCATION OF LIMITED RESOURCES RESOURCES – scarce WANTS – unlimited The function of an economy is to find ways how to allocate these.
PUBLIC SECTOR. PUBLIC SECTOR V PRIVATE SECTOR Public sector: Public sector: everything that is... owned by the g____ for the benefit of all c____. Private.
Chapter 2. A. A shortage of resources used to satisfy the wants and needs B. Basic economic problem for any society is how to manage its resources. C.
Chapter 5 The Free Enterprise System. Traits of Private Enterprise Section 5.1.
GOVERNMENT INTERVENTION IN THE ECONOMY Learning Objectives: The role of government in the economy Government provision of goods and services Fiscal policy.
Economic Resources and Systems Chapter 2 pp
Introduction to Economics What do you think of when you think of economics?
WHAT ROLE DOES THE GOVERNMENT PLAY???. WHAT DOES THE GOVERNMENT PROVIDE FOR IN A MARKET ECONOMY? The government provides goods and services such as military.
Business Management - Intermediate 2Business Enterprise © Copyright free to Business Education Network members 2007/2008B104/078 – Bus Enterprise – Business.
Differences between Capitalism and Socialism In capitalism goods and services are distributed by private businesses People are allowed to strive and obtain.
The public and the private sector. Intro - vocabulary goods and services public sector private sector public goods Free of charge / no charge For the.
Economic Systems. Capitalism Free Enterprise Market Economy Definition  An economic system based on private ownership of property and means of distribution.
Market Failure Market failure exists whenever a free market, left to its own devices, fails to deliver economic efficiency It occurs when the interaction.
The Role of Government and Taxation
II. Evaluating Economic Performance
Private sector: private businesses and enterprises
Power of the Market Free Enterprise.
Quality of government expenditure
THE PUBLIC SECTOR.
Economics and the American Economy
Deciding on what to produce
Economic Systems of Industrialization
Capitalism and Free Enterprise
ECONOMICS CHAPTER 3 U.S. PRIVATE AND PUBLIC SECTOR
Presentation transcript:

PUBLIC SECTOR

PUBLIC SECTOR V PRIVATE SECTOR Public sector: Public sector: everything that is... owned by the g____ for the benefit of all c____. Private sector: everything that is... owned by private i____ for the benefit of the o____.

Reading: “The Public Sector” (RB, p. 34) Read the text and explain the difference between public goods and merit goods.

1. a) PUBLIC GOODS: Goods and services provided by the state that can be consumed by everybody in a society. Find the definition of the following concepts in the reading: They are 1. Non-rival: (to rival = to compete) 2. Non-excludable: (to exclude somebody = to leave somebody out) Consumption by one person does not reduce the amount available to others Once provided, all individuals will benefit.

Why does the state have to provide public goods? Non-rival + non-excludable Hard to get people to pay to consume them. Private sector cannot make profit on them. Unprovided by private sector.

ARE THE FOLLOWING PUBLIC GOODS? EXPLAIN BY USING THE CONCEPTS: NON-RIVAL & NON- EXCLUDABLE ! Street lights Healthcare Fireworks Electricity National defence Public roads A hamburger

HOW ARE PUBLIC GOODS PAYED FOR? Taxes (most often) Own profit/surplus (sometimes) Philantropy: donations (rarely)

2. b) MERIT (n., v.) Noun: If sg. has merit, it has good or worthwhile qualities. The film had artistic merit. Verb: Deserve, earn. Such ideas merit careful consideration.

MERIT GOODS: fill in the gaps market, free, expensive, subsidize, subsidized, private (2x), social Goods or services provided free or cheaply for the benefit of the entire society by a government. Governments _____ these goods and services or provide them _____ at the point of use because they would be too _____ and therefore under-consumed if left to the _____ forces or _____ enterprise. Consumption of merit goods is believed to generate positive externalities- where the _____ benefit from consumption exceeds the _____ benefit. E.g.: compulsory vaccination of children, _____ housing, higher education, the opera

MERIT GOODS: fill in the gaps market, free, expensive, subsidize, subsidized, private (2x) social Goods or services provided free or cheaply for the benefit of the entire society by a government. Governments subsidize these goods and services or provide them free at the point of use because they would be too expensive and therefore under-consumed if left to the market forces or private enterprise. Consumption of merit goods is believed to generate positive externalities- where the social benefit from consumption exceeds the private benefit. E.g.: compulsory vaccination of children, subsidized housing, higher education, the opera

1. Public Corporations 2. Municipal Enterprises Which is run/ owned by... A. local government? B. central government?

Read RB, p. 34 and write questions to which the following sentences could be answers: By the government through taxes and their own trading „surplus”. Public goods and merit goods. Because individuals wouldn’t pay for them and they raise the society’s standard of living. Public corporations, nationalized industries, local authority services, etc.

Make word partnerships with the word “public” (RB, p 34) public sector public goods public corporations public utilities public ownership public service

HW – HAND-IN ASSIGNMENT Read MK, p. 110 Answer these questions: 1. How do the Friedmans define economic freedom? 2. What is the relationship between economic freedom and human freedom? 3. Explain: “Freedom cannot be absolute.” BRING THE MACKENZIE BOOK TO CLASS NEXT WEEK

The role of the government

Read “The Good Life Beckons” (RB, p. 36) According to Galbraith, what are the responsibilities of the state? Which of these serve short-term goals, and which long-term goals? Why are there certain activities which fall “beyond the time horizon of the market economy”?

RB, p. 37/III 1. evident 2. low-cost 3. at odds with 4. illness 5. to be borne in mind (to bear, bore, born(e)) 6. the underclass (collective noun) 7. the affluent (collective noun) 8. achievements 9. reluctantly 10. planetary

Explain what the Friedmans mean by: “central economic planning” “economic freedom” (2 parts) “More than 40% of our income is disposed of on our behalf by government...” “We are not free to buy an automobile without seatbelts.” “freedom to use the resources we possess in accordance with our own values.” “You are not free to... engage in a host of occupations without getting a permit or licence from a government official.” “Freedom cannot be absolute.”

What is the relationship between economic freedom and human freedom? “laissez-faire could produce over-mighty individuals, Friedman thought. The goal should not be laissez- faire, but market competition: this, he said, would protect men from each other.” “Neoliberals like Friedman saw economic liberty as the safeguard of all freedoms; a swelling state was the road to tyranny.” Source: “New brooms”, The Economist, October 11, 2012

Work in groups List the advantages and disadvantages of the welfare state. Don’t forget to use both texts in the unit.

Welfare state Advantages Minimum standard of living provided for everyone (including the underclass) Social protection Support of scientific research that doesn’t promise short-run profit Protection of the environment Disadvantages No “freedom to choose how to use our income” High taxes No “freedom to use the resources we possess in accordance with our own values” Government intrusion in personal life, decision- making

Taxation: good or bad? Why do governments impose taxes? What are taxes used for? What are the arguments for and against taxation? Which do you agree with?

The Kansas tax-cut “experiment” The plan: What are the aims of the new governor? w w Will it work? Listen to a small business-owner. What is he planning to use the extra income for? 2 years on: Did it work? (from 2:00)