1. Island Simulation Why we need Economic Systems

2. Picture yourself on vacation in spectacular Southeast Alaska... kayaking with a group of classmates. You can’t believe you are there. You have never kayaked before in your life, but the school had a special deal enabling students to participate in this summer kayaking trip and do some whale watching. It sounded great, so you went along.

3. It’s the end of July.  The weather is warm and the scenery is spectacular. You’ve had good times and easy paddling so far, but today you’ve noticed clouds gathering and an chill in the air. Still, you and your group climb into the kayaks and get started, thinking that if it does rain you will be able to dry off later, after you travel the day’s course and make camp.

4. Just as you expected, rain begins to fall just after lunch... And it shows no sign of stopping soon. The clouds get darker, the rain pours down harder and harder, and THE WIND COMES UP!!! It becomes difficult to paddle in the waves. You might be in trouble. Then...

5. A huge wave hits the kayaks! And very, very quickly, you capsize. But you and your friends remember your safety training. You grab hold of what you can and swim for the shore. Thank goodness you were careful to travel near land at all times. Gasping for breath and shivering from exposure to the cold water, you eventually drag yourself up onto the shore.

6. Now you have a new problem:  You and your friends are stranded on a small, deserted island. You do not know how long you will have to be there. The nearest settlement is over 100 miles away, and you are not equipped to make it there, so you will have to wait for rescue... Which will first have to realize your are lost and even then they will have no idea where you are at.

7. You have struggled through the storm to make it to shore  Sopping wet and tired from the swim, you realize you may be here a while.  Assume you will be here 1 to 6 months.  Step 1: Assess your wants and needs  Brainstorm as a group all of the wants and needs you will have for the next 1 to 6 months.  Step 2: Assess your resources  Create a chart to outline what factors of production you have available.

8. Now, plan for survival  Create a very specific, detailed, survival plan that outlines what your days and lives will look like in the upcoming weeks.  Your plan should address the following questions:  What will you produce? (Think about your needs & wants!)  How will you produce these things?  Be sure to think about who will do what  Remember, you are limited by the resources described!  How you will divide it up and share what you produce?  Share? Trade?  Do some get more than others? Why?

9. So what was the basic problem you were facing?  Scarcity, scarcity, scarcity!!!

10. Economic Systems and Goals for Society

11. Guiding Questions  How do societies make choices about how to solve the problem of scarce resources?  What leads different societies to make different choices?

12. Three Basic Questions every society must answer  What goods and services should be produced?  How should these goods and services be produced?  Who consumes these goods and services?

13. How a society answers determines their type of…  Economic System

14. Economic Systems  The method used by a society to produce and distribute goods and services  which system a society employs depends on its goals and values

15. Why do societies make different choices about our 3 questions…?  They have different priorities!  In your notes, create a list of the most important things a government can do. Keep your list focused on DOMESTIC issues (nothing about foreign policy, or wars, and so on…)  Rank your list from your #1 most important thing to the least important.

16. In groups…  In groups of 3-4, discuss your lists. As a group, come up with your top 5 priorities. Be prepared to share out your answers.

17. Economic Goals for Society  There are 6 basic goals that guide economies and influence the rules they create to govern themselves…

18. 1. Economic Freedom  Freedom of consumers, workers, and producers to make choices in the marketplace

19. 2. Economic Efficiency  Relates to getting the maximum benefits from our limited productive resources

20. 3. Economic Equity  Pertains to what is considered fair or unfair about the effects of economic policies

21. 4. Economic Security  Pertains to the desire of people for protections against various economic risks over which they have little or no control, such as unemployment, bank failures, and destitution in old age

22. 5. Economic Stability  Full employment: everyone who wants a job, has a job  Price stability: absence of inflation and deflation in the general price level

23. 6. Economic Growth  Production of increasing amounts of goods and services in the long run

24.  Go back to the list you and your group members made about your economic priorities…  Which of the 6 goals is promoted by each priority?  Which of the 6 goals is actually held back by each priority?

25. To sum up…  Societies, just like individuals, have to make choices about what to do with their scarce resources  Every society makes choices about what goods/services to produce, how to produce them, and who consumes them.  Societies make different decisions because they have different economic goals.  Vocab:  3 basic questions  Economic systems  Economic freedom  Economic efficiency  Economic equity  Economic security  Economic stability  Economic growth