1. ECONOMIC SYSTEMS PART 2

2. Homework: Research Project Part 2 ◦ Write a short essay on the economy of a nation you researched. ◦ Be sure to include CLEAR THESIS STATEMENT ◦ Break essay down into paragraphs (Introduction, Conclusion, Body Paragraphs)

3. Homework: Research Project Part 2 ◦ In your essay, you should include: a.The type of economic system represented in the country b.The economic goals and values of the country c.Background information about the country’s economy (traditional economic practices, resources, government inference, employment, etc.)

4. Looking Ahead ◦ BRING TEXTBOOKS NEXT CLASS!!!-THIS WILL BE GRADED

5. Warm Up ◦ Identify three ways in which the Free Market System has or will impact you, either in the past, the present, or the future

6. Learning Objectives ◦ Enhance essay-writing skills ◦ Analyze and Interpret the ideas of Adam Smith ◦ Build connections to your own life

7. Practice Thesis Statement Writing ◦ Thesis Statement= 1-2 Sentences ◦ Goes at the end of the introduction ◦ Summarizes what will be coming in the body paragraphs of the essay You now have 10 minutes to construct a clear and concise Thesis Statement for your homework

8. Journal 3: Adam Smith

9. Smith and Capitalism ◦ Capitalism: Economic system in which a country's economy is controlled by private owners rather than the state ◦ Self-Interest: One’s own personal gain ◦ Competition: Struggle among producers for the money of consumers ◦ Incentive: Expectation that encourages people to behave in a certain way ◦ Laissez-Faire Economics: Limiting government intervention in the economy

10. Check for Understanding: 2 paragraphs ◦ What did Smith say about the role of Self-Interest in the economy? Do you agree with Smith? Why or why not? ◦ Think about your own life…how are the choices that you make motivated by Self-Interest?

11. Bags of Chips- COMPETITION ◦ Recall the Bags of Chips Experiment that we did…who represented my competition in regards to selling the Bags of Chips? How did this impact the pricing of the Chips? ◦ I two volunteer to represent new companies selling Chips ◦ Each producer has 20 bags of Chips to sell ◦ Each consumer has $10.00 ◦ 1 st Round= Each consumer can buy 1 bag of Chips ◦ Each producer will set their own prices on the bags of chips ◦ The producer with the most money can keep the extra chips

12. Bags of Chips- Self Interest, Competition, and Incentive ◦ How did Self-Interest impact the simulation? ◦ How did Competition impact the simulation? ◦ What Incentives were provided for the consumers and the producers? ◦ How were prices impacted by Self-Interest, Competition, and Incentives?

13. Forces in the Free Market ◦ Self-Interest: Motivating force behind the Free Market ◦ Competition: Regulating force in the Free Market ◦ How is Self-Interest a Motivating Force in your life? Provide an example from your own decisions ◦ How is Competition a Regulating Force in the your life? Provide an example from your own decisions

14. The Invisible Hand ◦ Invisible Hand: Way in which the market regulates itself through self-interest and competition working together ◦ Willy’s Bagels is competing for your business with La Costa. Both La Costa and Willy’s have come out with new products due to the competition between these two businesses. While both businesses want to make a lot of money on their new products, they realize that if they charge too much money then they will lose business. In 2-3 Sentences explain how this scenario shows the concept of the Invisible Hand

15. The Invisible Hand: Groups of 4-5 ◦ Your group will be writing out a skit that shows the concept of the Invisible Hand ◦ You will have two producers and two-three consumers ◦ Be sure to show how Self-Interest and Competition play a role in regulating the market ◦ Your skit must be clearly written out and will be performed for the class

16. Consumer Sovereignty ◦ The power of consumers to decide what gets produced ◦ How do we see Consumer Sovereignty in the Invisible Hand concept? ◦ To what extent do you think Consumer Sovereignty plays a role on the businesses in Brentwood? ◦ In which of the four economic systems do you think Consumer Sovereignty plays the largest role?

17. Warm Up ◦ Do you think competition is good or bad in economics? Why? ◦ Do you think competition is good or bad in your own life? Why?

18. Homework: Research Project Part 2 ◦ Write a short essay on the economy of a nation you researched. ◦ Be sure to include CLEAR THESIS STATEMENT ◦ Break essay down into paragraphs (Introduction, Conclusion, Body Paragraphs) ◦ In your essay, you should include: a. The type of economic system represented in the country b. The economic goals and values of the country c. Background information about the country’s economy (traditional economic practices, resources, government inference, employment, etc.)

19. Looking Ahead ◦ TEST NEXT WEEK

20. Learning Objectives ◦ Analyze advantages and disadvantages of Capitalism, Socialism, and Communism ◦ Interpret the reasons why the Communist economy of the USSR fell apart ◦ Engage in Artistic Expression

21. Socialism and Communism ◦ Socialism: Social and political philosophy that is based on the idea of distributing wealth equally among people through a democratic means ◦ Communism: Political system based around a centrally planned economy in which all economic and political power is in the hands of the government ◦ How are these two terms similar? ◦ How are these two terms different? ◦ What examples of Socialistic or Communist countries? What do you know about them?

22. Extra Credit Simulation: Comparing Communism to Capitalism ◦ Who wants Extra Credit??? I will ask you a question worth 30 extra credit points

23. Extra Credit Question ◦ What are the four types of economic systems and give an example of each in the modern day

24. “Share the Wealth” Simulation: Comparing Communism to Capitalism ◦ I will ask one person a question ◦ If they get it right they get a piece of gum

25. “Share the Wealth” Question ◦ Explain the Invisible Hand Concept

26. Check for Understanding ◦ What do these simulations show you about the advantages of Communism? ◦ What do these simulations show about the advantages of Capitalism? ◦ What do these simulations show you about the disadvantages of each? ◦ Would you rather live in a Communist or Capitalistic society? Why?

27. Textbook Work: Pgs. 36-38 ◦ Identify three reasons why the Soviet economy collapsed

28. Reasons why the Soviet economy collapsed ◦ Best resources given to the military and space industries, and heavy industry a.Heavy Industry: Requires a large capital investment to produce items used in other industries b.What examples of Heavy Industry do we have in the modern United States? ◦ No incentives for people on collectives or in industry to work hard due to guaranteed government employment and income a. Collectives: Large farm leased from the state to groups of peasant farmers ◦ Illegal for people to engage in entrepreneurial activity a. What is “entrepreneurial activity” ◦ Consumer goods scarce and poor quality

29. Create a Facebook Page ◦ Pretend you are a consumer living in the Soviet Union…create a Facebook Page for yourself that shows what it was like to be a consumer in the economy of the Soviet Union ◦ Be sure to: 1.Include pictures and graphics that depict the economic conditions 2.Make a list of consumer goods that you like and dislike 3.Provide comments on your standard of living 4.Create some biographical information about yourself and your country

30. In-class time to Start Study Guides ◦ Use this in-class time to start working on your study guides

31. Warm Up ◦ What is the difference between Socialism and Communism? ◦ Why did the Soviet Union’s Communist economy fall apart?

32. Homework: Research Project Part 2 ◦ Write a short essay on the economy of a nation you researched. ◦ Be sure to include CLEAR THESIS STATEMENT ◦ Break essay down into paragraphs (Introduction, Conclusion, Body Paragraphs) ◦ In your essay, you should include: a. The type of economic system represented in the country b. The economic goals and values of the country c. Background information about the country’s economy (traditional economic practices, resources, government inference, employment, etc.)

33. Looking Ahead ◦ TEST NEXT WEEK!!! ◦ Bring Quizzes to Next Class

34. Learning Objectives ◦ Interpret modern economic conditions in Russia and China ◦ Analyze Mixed Economies and the Circular Flow Model ◦ Synthesize Economic Systems

35. Vocabulary ◦ Free Enterprise: Economic System based on private and individual decisions, rather than state control ◦ Privatization: Sell state-run firms to individuals ◦ Private Property: Property that is owned by individuals or companies ◦ To what extent were these economic terms part of the founding principles of the US? ◦ To what extent have these economic terms been applied to the economies of Russia and China in the modern day?

36. Russia: A Nation Still in Economic Recovery ◦ https://www.youtube.com/watch?v=AQkWkTUG3Ec https://www.youtube.com/watch?v=AQkWkTUG3Ec ◦ What have you heard about Russia in the news with regards to Ukraine? How does this connect to why the EU and the US have put economic sanctions on Russia? a.EU: European Union b.Economic Sanctions: Economic restrictions and penalties put on one country ◦ What is the purpose of Russia’s Civil Chamber? How does this institution represent a separation from the Soviet economic structure? ◦ According to this video, how is the government of Russia negatively impacting economics? Why do many Russians not want to involve the government in their business? ◦ How is the low Russian unemployment rate explained? ◦ In what ways has the Russian economy changed from the days of the USSR?

37. China’s Rising GDP ◦ GDP: Gross Domestic Product- Total value of goods/services produced in a country

38. China’s Modern Economy ◦ https://www.youtube.com/watch?v=h_hsgEgiCXc https://www.youtube.com/watch?v=h_hsgEgiCXc ◦ What does this video say about the relationship between the Chinese and US economies? How do they impact each other? ◦ How does psychology play a role in international economics? ◦ What is the economic policy of China in regards to exports and consumer spending? ◦ Why might the Chinese not be as experienced with Market economies as the US? ◦ Why are the Chinese people losing confidence in their government’s ability to manage the economy? ◦ How do recent trends in the oil market help to predict China’s economic future?

39. Check For Understanding ◦ Do you think Russia and China’s past economic history has influenced their modern economies? Why or why not? ◦ What similarities do you see between Russia and China’s economies? ◦ What differences do you see between Russia and China’s economies?

40. Transition ◦ Both China and Russia’s economy are in “Transition” ◦ Transition: Period of change in which an economy moves away from a centrally-planned economy toward a market-based system ◦ In one paragraph: Give three examples of times in your own life where you went through a transition. Explain what it was like for you to go through these transitions. Were you immediately successful or did you experience some failures? What do your transitional experiences tell you about when a country is in an Economic Transition?

41. Retaining Information ◦ What are the four types of economies? ◦ Where do China, Russia, and the US fit on the continuum line? a. Continuum: A range with no clear divisions ◦ Which of the four types of economies do most modern nations have? ◦ What is the role of government in this type of economy?

42. Continuum of Mixed Economies

43. Circular Flow Model of a Mixed Economy ◦ Answer the questions on the Circular Flow Model of a Mixed Economy ◦ Fill out the Review Section for the Test on the back