1. Introduction to Business & Marketing
Mixed Economies
Introduction to Business & Marketing

2. Quick Review! What are the three basic economic questions?
What goods and services should be produced?
How should those goods and services be produced?
For whom should the goods and services be produced?

3. Quick Review! What do they tell us about a nation’s economy?
The economic questions define the nation’s economic system.

4. Quick Review! Traditional Economies Market Economies Command Economies
List the three types of economic systems.
Traditional Economies
customs, traditions
Market Economies
free enterprise, competition
Command Economies
dictator, gov’t controls everything

5. Task #42
Compare the American economic system to other economic systems.

6. Mixed Economies No economy is purely any one economic system.
Mixed economies have industries that are either operated or regulated by the government.
They also have individually owned enterprises.
Example:
The U.S.A. is a mixed economy with strong characteristics of a market economy.
Government has some involvement in business.
Government influence is limited by laws and regulations.

7. Types of Mixed Economies
Nations in the world today typically represent one of three mixed economies.
Capitalism
Socialism
Communism

8. Individual Competition
Activity Link:
Distribute Hershey kisses. Each student gets 3 pieces of candy, except for three students who should receive up to 6 pieces. Listen for “that’s not fair” and “why do they get more?” complaints.
Students compete in Rock Paper Scissors with the requirement that each loss costs a piece of candy to be given to the winner. If a student runs out of candy, s/he should sit and watch. Continue until only a few students have any candy left.
Stop the game – discussion. How did you feel at the start of the game? How did you feel when you ran out of candy and had to sit down? What tactics could you have used to get back into the game? (Steal, bargain, buy off someone, lie) Is the game fair? What could the teacher do to make the game more fair – should s/he do it? Take note of responses.
Discuss capitalism
Individual Competition

9. Capitalism Characterized by: Role of Government Private ownership
Freedom of competition
Results in unequal classes
Role of Government
Support the people
Take care of those who cannot care for themselves
Private Ownership: students started with their own candy
Freedom of Competition: students played rock, paper, scissors
Results: some students won, most lost everything
The class struggle was played out in the students’ complaints (the workers’ revolt) through their responses about how they could have gotten back into the game and arguments about the game’s fairness.

10. Think About It…
Capitalism is characterized by private ownership & competition without government interference.
What is an example of two companies that compete against each other?
Our government also provides support…
What are some of our government-regulated industries?
Agriculture
Pharmaceuticals (FDA)
Health Care (ACA)

11. Government Regulation!
Announce that it’s time to pay taxes. Anyone with more than five pieces must pay the government 2 pieces of candy. Anyone with more than ten pieces must pay 3. Use collected candy to give everyone in the class at least one piece.
Government Regulation!
How do you feel now? Is it fair?

12. Socialism Characterized by: Role of Government:
Government Ownership of Key Industries
Goal of Social Equality
Results in Higher Taxes
Role of Government:
Access to Social Services ensure standard of living
Government Ownership: teacher collects candy (charges taxes)
Goal for Social Equality: each student has at least one
Social services – ensure a good standard of living
Taxes – help finance government services
Key industries – telecommunications, natural resources, transportation, banking
Examples: Canada, Germany, Sweden

13. Who wants to play again? Why not?
Ask who wants to play again – probably only a few brave students will raise their hands. Collect all the candy, then redistribute evenly (3 pieces) to each student. Discuss the concept of communism.
Who wants to play again?
Why not?

14. Communism Goal of economic equality Results in class-less society
Everyone works & shares.
Results in class-less society
Some refuse to work
All share resources
No supervision required
In reality, there is nothing to drive people to better themselves or to work hard.

15. Communism Today Characterized by government control Role of government
Provide for the needs of all individuals
Protect society’s interests
Examples: North Korea, Cuba, China

16. Comparing Mixed Economies
Capitalism
Communism
Socialism
Comparing Mixed Economies
What do all three mixed economies have in common?
Role of government is to support people
What is the primary difference between each economy?
Ownership of resources
Level of control

17. Task #39
Identify characteristics of Free Enterprise.

18. The United States of America
Our capitalist economy operates according to the principles of free enterprise.

19. What is Free Enterprise?
Free enterprise is driven by the concept of supply & demand.
Free enterprise is characterized by:
Competition
Freedom of choice
Private enterprise
Profit motive
Competition – rivalry exists among businesses to sell their goods & services
Freedom of Choice – individuals make decisions about production and distribution
Private Enterprise – private ownership of economic resources
Profit Motive – individuals invest money and time to satisfy consumers’ wants

20. I, Pencil An Essay by Leonard E. Read (1958)
What might cause the process to change?
Is there a “master mind” driving the creation of pencils?
Why do people all over the world voluntarily make the parts of a pencil? For what are they trading hours of labor?
I, Pencil
An Essay by Leonard E. Read (1958)

21. Think About It… In Your Notes At Your Table
Describe the factors of production required to make a pencil.
Natural
Human
Capital
What might cause the pencil-making process to change?
Is there a “master mind” driving the creation of a pencil?

22. I, Pencil, am a complex combination of miracles: a tree, zinc, copper, graphite and so on. But to these miracles which manifest themselves in Nature an even more extraordinary miracle has been added: the configuration of creative human energies--millions of tiny know-hows configurating naturally and spontaneously in response to human necessity and desire and in the absence of any human masterminding!
Leave all creative energies uninhibited.
There's no limit to what we can accomplish.
- Leonard E. Read

23. Exit Ticket
Front
Back (Sticky Side)
Explain why people all over the world voluntarily spend hours making parts of a pencil, even if they don’t actually want or need a pencil.
Your Name