If there is one thing in your life you couldn’t live without, what would it be? 1 Reminder: Take Ch. 2 test online What will we learn today? What will we learn today? Standard The role of market economy in political and personal liberty. Standard Explain the roles of property rights, competition, and profit in a market economy. Unit: Economic Systems Day 2 Directions: On Day 2 of your Bellwork, answer the following question. You need to write a one paragraph response, so fill out all of Day 2. There should be little to no talking during the Bellwork.

Economics Chapter 2

 When done, you should be able to explain:  What to produce?  How to produce?  For whom to produce?

 Newspapers  Scissors  Markers  Glue  Glue sticks

 You are a group of entrepreneurs who have come together with common resources to produce a brand new product. You must decide:  What are we going to produce?  How are we going to make it?  Who will use it?  You have 10 minutes to complete one prototype. Go!

 Your group prototype has been approved!  You now have 10 minutes to make one for every person in the class!  Go! Hurry! Only 10 minutes and you have a lot to make!!!

 One representative bring up all of your goods.  Let’s count how many each group was able to make.  Let’s record it on the board.

 There is not enough of each good to give each person in the class one.  What do we do?  How do we distribute them?  Who is getting them?

 Discuss the following in your groups and be ready with a solution:  Who will benefit from your allocation method and who will suffer?  Do you think one allocation method is fairer than another?  Besides producing more, is there any way for everyone to be satisfied?  What three questions did your group have to answer in this lesson?

 What you just did was define an economic system.  Economic systems help people decide how to organize production and consumption.

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 The Rise of Mixed Economies  No economy has all the answers.  Laissez faire: The idea that gov. should not interfere with the marketplace.  But every government must intervene, at least a little bit.  We need gov.: Who else would protect us with military or pave roads? Free market won’t do that.  Without gov. regulations, some firms might control entire markets (monopoly). 13

 Private property: Property that is owned by individuals or companies, not the gov.  Free enterprise: Private or corporate ownership of capital goods.  Continuum: A range with no clear divisions 14

 Transition: Time period while economy moves away from central planning to market-based  Privatized: Sells state-run firms to individuals  United States: Gov intervenes to provide order, vital services, and promote general welfare.  Law protects private property  Foreign investment is encouraged.  Some free trade  Few restrictions on bank industry 15

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