1. ECONOMIC SYSTEMS
1. INDICATOR:Compare how different economic systems answer the fundamental economic questions of what goods and services to produce, how to produce them, and who will consume them.

2. The basic economic dilemma: SCARCITY
Scarcity: the imbalance between unlimited wants and limited resources
--Most people want many things, or everything, but only can have some of them (there are exceptions, ex. Bill Gates etc.)
** Individuals and nations face this dilemma

3. Resources and Trade Offs
Resources are items needed to provide for basic goods and services (coal, oil, trees, water, etc.) or on the individual level (money, brains, skills, etc).
Most only have limited resources- Cuba has sugar, Iraq has oil. Columbia has coffee and cocaine.
** Therefore, countries and people need to trade one benefit in order to gain another-GOVERNMENTS MUST MAKE THESE CHOICES.
**What one gives up in order to gain something else is called OPPORTUNITY COST

4. SPECIALIZATION and INTERDEPENDENCE
Specialization-the mass production of goods or services that a person, country, or place can produce easily.
--every place is different- Why did Detroit become the Motor City? Why does Juan Valdez hail from Colombia?
Interdependence-The mutual relying of people to people or country to country- the world needs each other and must trade to get items everyone wants and needs.

5. The 3 Economic Questions that all societies must answer
What should be produced
How it should be produced
Who benefits from what is produced- who consumes

6. ECONOMIC SYSTEMS: Market/ Command/ capitalist communist
Mixed/ socialist
Hong Kong
USA
Canada
Northern Europe
Eg. CHINA
cuba
MORE GOV’T
CONTROL
LAISSEZ-FAIRE
Every country falls somewhere on this continuum

7. MARKET ECONOMIES/CAPITALISM
KEY CHARACTERISTICS
Private ownership of property
Competition
Profit incentive
Laissez faire policies- little government interference
Low taxes
Laws of Supply and demand rule
Get ideas from Adam Smith
QUESTION- What are some positives and negatives?

8. COMMAND /COMMUNIST SYSTEMS
Key Characteristics:
Government owns all industry
Government owns all property
Government decides who and what is produced
Goal is to distribute wealth equally and share everything
Get ideas from writings of Karl Marx
QUESTION: what are some positives and negatives?

9. MIXED ECONOMIES/ SOCIALIST SYSTEMS
Most economies are mixed
Government controls key in dustries such as coal, steel, oil. (eg.- Canada provides a national health care system)
Higher taxes than pure market systems
More freedom than command systems

10. TRADITIONAL ECONOMIES
Tribal communities
-Things are done how they have always
been done
-People do what they need to do to survive
-Hunting, gathering, fishing etc.
-Trading of goods is common
Found in parts of Africa, Latin America,
Southeast Asia

11. ISSUES FOR DISCUSSION
What role does the US government play in the American Economy
How does the US government handle trade with other nations?
Protectionism vs.Free Trade
Tariffs- good or bad