Economic Systems Traditional Command Market Description Advantages Disadvantages

Give a description of a mixed economy: Traditional Command Market Mixed Country Examples

Identify the seven Major Economic and Social Goals and give a brief explanation of each.

Characteristics of Free Enterprise and Capitalism Define Capitalism: Define Free Enterprise: Use the chart on page 47 to complete

Traditional Command Market Economic Systems Traditional Command Market Allocation of scarce resources stems from ritual, habit, or customs. (social Behaviors) Central authority makes decision on: What to produce, How to produce, and for who to produce decisions People and firms act on their own best interest to answer: What to produce, How to produce, and for whom to produce Little government intervention Economic Roles for all members Stable, predictable and continuous life Change in a short period of time Basic education, public health and public services at little or no cost Able to adjust to change Individual Freedoms Decentralized decision making Variety of goods and services Consumer satisfaction Discourages new ideas and new ways of doing things Lack of progress Low Standard of Living Does NOT meet wants and needs Lacks Incentives Large Bureaucracy Little Flexibility to deal with day to day changes New ideas are discouraged Rewards only productive resources Competition and change Does NOT provide public goods: universal education and public health Guard against market failures Description Advantages Disadvantages

Inuits of NA and Aborigines North Korea Cuba US* Canada Japan US China Give a description of a mixed economy: People carry on economic affairs freely, but are subject to some government intervention and regulations. Traditional Command Market Mixed Inuits of NA and Aborigines North Korea Cuba US* Canada Japan US China France Country Examples

Identify the seven Major Economic and Social Goals and give a brief explanation of each.

Furthers the goal of economic equality because its fair. Conflicts with goal of full employment by raising unemployment Conflicts with goal of economic freedom by preventing employers from paying what they feel is a fair wage Explain how in increase in the minimum wage might involve a conflict of goals. People choose their own occupations, employers, and uses for their money; producers choose where and how they produces things etc Describe some of the economic choices people and producers in the US are free to make.

Characteristics of Free Enterprise and Capitalism Define Capitalism: private citizens (entrepreneurs) own the factors of production Define Free Enterprise: competition is allowed to flourish with a minimum of government influence Economic freedom: People choose their jobs, employers, and how to spend their money Businesses choose what products to sell and what for charge for them (work nights, days, indoors etc. ) accept and reject jobs Voluntary Exchange Buyers and sellers freely and willing engage in market transactions Both B+S are better off after the exchange Value products or save it Cash is more valuable then the product sold Private Property Rights: People own and control their Possessions as they wish Tangible = houses and cars Intangible = skills and talent Free to make decisions about their property and their abilities Incentive to work, save, and invest Not afraid to use, accumulate, or lend it Profit Motive People and organizations May improve their material well being by making money Profit: persons or organizations are better off at the end of a period then they were at the beginning Competition: Producers and sellers compete with one another to attract consumers, while lowering cost. Consumers compete with one another to obtain the best product at the lowest cost TV’s, Houses, Cars Use the chart on page 47 to complete

Entrepreneurs Consumers Government What is the ROLE of Entrepreneurs, Consumers, and Government in the Economy? Entrepreneurs Consumers Government Organize and Manage: Land, capital, and Labor to gain a profit Start new businesses, auto repairs, restaurants, etc Want to “Be their OWN boss” Willing to take a RISK Many fail, others succeed, VERY FEW become wealthy and famous (Walt Disney) “American Dream” Improve quality of products and cut prices Introduce: new products, greater competition, more production, higher quality and lower prices Have power because they determine which products are ultimately produced (if we like a product it will sell) Consumer Sovereignty: sovereign ruler of the market The customer is always right Wants change constantly (i.e. computers, cell phones etc) Involved because Americans want them involved Protector: enforce laws (i.e. false advertising; abuse of individual freedoms Protects property, enforces contracts, and generally tries to make sure follow the “rules of the game.” Provider and Consumer Nat’l – defense services State- education and public welfare Local – parks, libraries, and bus services