~Warm Up~ What are 3 benefits of a mixed economic system???

Some of the benefits of a mixed economy are:  Offers consumers the freedom to choose from a variety  Gov’t can redistribute $$$ to those in need  Eliminate inefficiency if people get to keep what they earn

SPECIALIZATION Let’s review together…

Specialization 1.What is specialization? 2.Why do you think Miss Stack shifted from a multi- toy company to a specialized doll making company? Why would that be beneficial for her? 3.How might employees feel about this change? What are the benefits and costs of employees being told to only make one product and one produce alone. 4.How might what you learned in this story be applied to an international/global scale? How do you think countries should operate???

What is specialization?  Specialization means to concentrate your resources and energy into making a few items, rather than a variety of items.

Why do you think Miss Stack shifted from a multi-toy company to a specialized doll making company? Why would that be beneficial for her?  Could lead to improved sales and efficiency if you concentrate on what your company is best suited for.

How might employees feel about this change? What are the benefits and costs of employees being told to only make one product and one produce alone.  Employees might be bored at the idea of doing the same thing over and over again. Gets repetitive.  Benefit-employees get good at their jobs since it is broken down to simpler tasks

How might what you learned in this story be applied to an international/global scale? How do you think countries should operate???  In the same way, countries shouldn’t try to produce everything for its citizens. Rather, like the example with the toy company, countries should use their limited resources to SPECIALIZE in what the country is best suited for. And then, it can trade with other nations for other goods.

Three Aspects of Specialization: 1. Economic Advantages  Workers get good at their jobs  Less time wasted shifting from one job to another  Specialized capital can be developed 2. Trade or Exchange  Useful only if there’s a demand for your specialty  Could trade or barter (but is time consuming and inefficient)  Therefore, money usually facilitates exchange 3. Alienation  Can lead to boredom and low morale

Economic specialization leads to… 1.) EFFICIENCY 2.) HIGHER STANDARD OF LIVING

Evolution of the Market Economy pg Division of Labor (people have specific tasks…think of the assembly line) 2. Leads to Specialization (really good at one or a few products) 3. Wants to become an expert in your good, so you develop specialized capital (good technology/tools) 4. Leads to efficiency 5. Allocate your resources (sell your goods) 6. Leads to PROFIT!!!

Directions: On the back, create a comic strip that illustrates the evolution of the market economy. 1. Division of Labor2. Specialization3. Specialized Capital 4. Efficiency5. Allocate Resources 6. Profit

Homework: Section 2.3 Comparative Advantage  Pages  Key Terms: Absolute Advantage Law of Comparative Advantage Specialization Barter Money Division of Labor  Questions 1-4