1. Do Now Take out Apprentice HW and be ready to share Pick up a textbook from the open cabinet to the right of the room Read Business Building Blocks on page 26 and answer the Practice Questions related to the reading

2. Types of Economic Systems Economics: study of how society chooses to use resources to produce and distribute goods and services for peoples consumption Businesses contribute via inventing products that use available resources Economic system determines how resources will be used Primary goal is to provide people with a minimum standard of living, or quality of life Two types of economic systems: 1. Market Economy 2. Command Economy

3. Market Economy Economic decisions made in marketplace according to laws of supply and demand Marketplace is anywhere money changes hands Where have you used money? Price plays large role in this economy If price consumers pay for goods/services is too low, business will not earn profit and they will not bother providing that good/service If price is high enough, they will provide it Must not be too high to point where customers are deterred from buying

4. Creating Graphs How many Gatorades would you be willing to buy at the following prices per bottle: $1.00 $2.00 $4.00 $6.00 $8.00 Make a bar chart that represents your reaction to the increase in price With your partners, determine why the price per bottle may increase

5. Demand Demand: quantity of goods and services that consumers are willing to buy at various prices Consumers determine demand for item Higher the price, fewer consumers will buy of that item Lower the price, more consumers will buy of that item

6. Supply Supply: amount of goods and services that producers will provide at various prices Producers want to receive price for goods and services that will cover their costs and provide a profit Producers will produce a greater quantity as the price of the good increases

7. Supply and Demand Equilibrium price: when quantity demanded and quantity supplied meet; price at which amount supplied and amount demanded meet Shortage: amount supplied less than amount demanded Surplus: amount supplied greater than amount demanded

8. Exercise Count your money twice in order to be sure of your amount As you see certain items for sale, indicate the price at which youd be willing to pay Why would you be willing or unwilling to pay the amount at which it is being sold?

9. Supply and Demand Supply Demand Supply and Demand Supply and Demand Interactive Graph

10. Price Impact Charts Provide a situation entailing an increase in price in a certain product of your choice Create a graph illustrating the response in supply an demand Identify the equilibrium price, as well as surplus/shortage Provide a situation entailing a decrease in price in a certain product of your choice Create a graph illustrating the response in supply an demand Identify the equilibrium price, as well as surplus/shortage

11. Closure How does price impact supply and demand of particular goods? What is a shortage? What is a surplus?

12. Do Now In your notebooks: Imagine I decided that no matter how clear or unclear a report is, how many answers are correct or incorrect on a quiz, or how good or bad a student project is, I will give all of you an average grade. Write down how you would feel and what you would do as a response. How well would you retain information or how much effort would you put into assignments?

13. Market Economy Capitalism: market economy system where resources are privately owned Can own your own home, land, or business As producer, you decide what to sell and how much to charge As consumer, you decide where to live and shop and what to buy Government control is minimal Primary role is to support marketplace by removing obstacles, such as trade barriers US and Japan are capitalist countries

14. Market Economy Offers profit motive Reward for taking risk that encourages people to start businesses Offers competition Encourages businesses to produce better and cheaper products Advantages: Individual freedom to choose products and start a business or choose career Disadvantages: Those without wanted job skills dont receive income One or two businesses control the market, leading to higher prices and lower quality products

15. Command Economy Also known as planned or managed economy Central authority makes key economic decisions, such as the government or state Two types: 1. Strong command economy 2. Moderate command economy

16. Strong Command Economy State controls all resources for common good Decides what to produce, how much, and how to distribute China, Cuba, and many Latin American and African countries are like this

17. Moderate Command Economy Also called socialism Some form of private enterprise State owns major resources, such as airlines and steel, and makes key economic decisions Individuals may own some businesses, however France and Sweden have moderate command economies

18. Command Economy Advantages: Guarantees everyone equal standard of living State provides with a job, places to live, and health care Goods and services distributed evenly Usually less crime and poverty Disadvantages: Little choice of what to buy Goods that arent necessities (fashion clothing / DVD players) often unavailable Prices and wages fixed, so there is no incentive to produce a better product or run your own business

19. Mixed Economy Combination of market and command economy State takes care of peoples needs while marketplace takes care of peoples wants Example: US Government provides defense and education, among others Marketplace provides cars, computers, and fast food, among others

20. Command Economy Vs. Market Economy First Lady and Former President Square Off Use your notes from class and the video to write a one-page report indicating which type of economy you would prefer to live in and why