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Warm Up Where do you think that the United States of America falls on this economic continuum? Why?____________________________________________________
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Economic Systems
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Objective I am learning about different types of economies.
This means that I will be able to differentiate between a market, command, and traditional economies.
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What is ECONOMICS all about? REVIEW
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Economics focuses on CHOICES!
It is the study of how people choose to use scarce resources to satisfy their wants.
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Background info The world’s economic systems fall into one of four main categories: Traditional Economy Market Economy Command Economy Mixed Economy However, there are unlimited variations of each type. An economic system must define what to produce, how to produce it, and for whom to produce Depending on the products produced and the environment, certain economic strategies will be more successful than others
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Economic System An economic system is the system of producing and distributing of goods and services and allocating resources in a society.
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Command Economy aka Planned
In a command economy, the government decides how many of which goods are produced. Ex: production, investment, prices, and incomes
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Command Economy conti…
Found in North Korea, Cuba and also China The government makes decisions of what to produce, how much it should cost, what it should look like Sell what the government lets the people It's easy to change directions because it is coming from the only power at the top of the pyramid Don't have a lot of freedom Planned economy Is the opposite of demand/market economy The government decide everything you´re doing The government pays workers People that is in the command economy listen to the government and so what the government told them to do. All the money that stores receive will go to the government Has disadvantages because few people control so much -- corrupt THERE ARE NO COMPETITION IN "Command economy". Sets prices for the goods Most of the resources owned by government The countries that have this kind of economy usually ended up having a super duper rich government but poor citizens.
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Traditional Economy A traditional economy is an original economic system in which traditions, customs, and beliefs shape the goods and the products the society creates. Countries that use this type of economic system are often rural and farm-based
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Traditional Economy conti…
Work in groups of families to survive Decisions are not decided by customs/traditions Not much use of technology/ Not much use of money Found in rural, non-developed countries, ethnic groups All activities are centered toward the family/ethnic unit "barter" - trade Mostly handmade Parts in Africa, Southwest Asia, Native American tribes still use traditional economy They only get enough to eat and feed their families in a traditional economy. Men/Women are given different roles (might be a reason for sexism.) Mostly farming Make enough to survive.
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Market Economy A market economy is an economy in which decisions regarding investment, production and distribution are based on supply and demand, and prices of goods and services are determined in a free price system
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Market Economy conti… Found in America, Russia, U.K., and most of the countries in Europe*( mixed economy) People can open their own company and earn money Individual choices -- highly values individual freedom FREEDOM is IMPORTANT Is the opposite of command economy There is more competition (competition of selling products) Competition determines the price More democratic--choices/decisions made by many people Individual's supply and demand determine the price, not the government
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Social Services Government services provided for the benefit of the community, such as education, medical care, and housing.
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Set up page 75 with the following:
Title this page: Traditional Economy Divide the page into a top half and a bottom half (same thing that we did yesterday)
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Set up page 76 with the following:
Title this page: Laissez-Faire Divide the page into a top half and a bottom half (same thing that we did yesterday)
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Set up page 77 with the following:
Title this page: Market Economy Divide the page into a top half and a bottom half (same thing that we did yesterday)
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Set up page 78 with the following:
Title this page: Command Economy Divide the page into a top half and a bottom half (same thing that we did yesterday)
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Set up page 79 with the following:
Title this page: 4 Economies Divide the page into a top half and a bottom half (same thing that we did yesterday)
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For each source, take about 5 minutes and independently write down everything you observe about this document … What do you observe? What do you notice first? Find something small, but interesting. What do you notice that you didn’t expect? What do you notice that you cant explain? What do you notice now that you didn’t earlier?
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Now answer the questions on the bottom half of the page independently!
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René de Voyer, Marquis d'Argenson: The Origin of Laissez- Faire
An economic environment in which transactions between private parties are free from tariffs, government subsidies, and enforced monopolies, with only enough government regulations sufficient to protect property rights against theft and aggression. The phrase laissez-faire is French and literally means "let [them] do", but it broadly implies "let it be," "let them do as they will," or "leave it alone." Scholars generally believe a laissez-faire state or a completely free market has never existed. Quote Translation: “Leave it be, that should be the motto of all public powers, as the world is civilized ... That we cannot grow except by lowering our neighbors is a detestable notion! Only malice and malignity of heart is satisfied with such a principle and our (national) interest is opposed to it. Leave it be, for heaven's sake! Leave it be!)” Questions: What does the term Laissez-faire mean? How can you relate the term Laissez-Faire to a market economy? Do you agree with scholars that a completely free market has never existed? Justify your answer. Do you agree or disagree with the Laissez-Faire philosophy? Why or why not?
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Now answer the questions on the bottom half of the page independently!
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Now answer the questions on the bottom half of the page independently!
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Now lets take a deeper look at each of these images…
What do you notice now that you might have missed? Add this to your chart
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Now answer the questions on the bottom half of the page independently!
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For each source, take about 5 minutes and independently write down everything you observe about this document on page 79… What do you observe? What do you notice first? Find something small, but interesting. What do you notice that you didn’t expect? What do you notice that you cant explain? What do you notice now that you didn’t earlier?
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Who answers the 3 basic Questions?
Determined By Customs, Traditions, community or religion Determined By Customs, Traditions, community or religion Traditional Economy Determined By Customs, Traditions, community or religion
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Now answer the questions (located on the back of the document) on the bottom half of the page independently!
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Processing Complete on a separate sheet of paper to be handed in at the end of class!
Which economic system is the best and why? Support with details from the documents Traditional Market Command Laissez-Faire
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