1. SS7E5.A - COMPARE HOW TRADITIONAL, COMMAND, AND MARKET ECONOMIES ANSWER THE ECONOMIC QUESTIONS OF: (1) WHAT TO PRODUCE, (2) HOW TO PRODUCE, AND (3) FOR WHOM TO PRODUCE. SS7E5.B - EXPLAIN HOW MOST COUNTRIES HAVE A MIXED ECONOMY LOCATED ON A CONTINUUM BETWEEN PURE MARKET AND PURE COMMAND. Bell-Ringer – Why do most countries operate using a mixed economy?

2. ECONOMIC SYSTEMS VIDEO https://www.youtube.com/watch?v=5xgwYRX19VU Take notes on the 4 economic systems and pay attention!

3. 3 KEY ECONOMIC QUESTIONS What goods and services should be produced? How should these goods and services be produced? Who consumes these goods and services? Every society must answer these questions due to SCARCITY!

4. TRADITIONAL ECONOMY What should be produced? By custom – whatever was produced in the past How should it be produced? By custom – however items were produced in the past For whom should it be produced? By custom – whoever usually received products will again receive them

5. MARKET ECONOMY What should be produced? Consumer choices dictate the success of goods and services How should it be produced? Business leaders choose the means of production Their goal is the most efficient and profitable methods For whom should it be produced? The consumers’ income determines who receives which goods and services

6. COMMAND ECONOMY What should be produced? The government decides what should be produced and owns most of the means of production How should it be produced? The government does the planning for production: factory locations, the occupations of workers and their salaries For whom should it be produced? The government controls the distribution system for goods/services: housing, transportation, consumer items and sets prices

7. HOW DOES A MIXED ECONOMY WORK??? A mixed economy contains elements of the market, command, and traditional economies. Many economists doubt that “pure” economic systems ever existed. Supply and demand typically determine prices; however, the government may step in from time to time to set prices, establish a minimum wage, or control industries such as healthcare and education. In some countries there is some private ownership of businesses, such as in China.

8. CONTINUUM A continuum is the range between two things, usually opposites of extremes. On an economic continuum the range is from a pure market economy on one far end to a pure command economy on the other end. Almost all countries have a mixed economy that falls somewhere in the middle or closer to one end than the other. CommandMixedMarket

9. CHARACTERISTICS OF THE UNITED STATES MIXED ECONOMIC SYSTEM Not all decisions are made by individuals reacting to the market. Federal, state, and local governments make laws regulating some areas of business. Public and private sectors contribute to the economy in varying proportions. For example, federal defense spending can boost the economy. Government steps in to handle inequities in the system. Many social/welfare programs were created during the 1930s. Traditional celebrations like Christmas affect portions of the economy.

10. WORK SESSION Working by yourself, complete the reading and handout answering the questions in complete sentences. When finished – Yellow – In a paragraph (5-7 sentences), compare and contrast the different economic systems. Blue and Green – In a paragraph (5-7 sentences), describe what a continuum is and how it can be used to compare and contrast different countries economies.

11. CLOSING Discuss your results with the person next to you.