1. Standards: ss6cg5b, ss6e5 a, b, c, ss6e6a, b, ss6e7a, b, c, d
Basic Economics
Standards: ss6cg5b, ss6e5 a, b, c, ss6e6a, b, ss6e7a, b, c, d
EQ: How do you identify the three economic systems? Learning Target: I can analyze and compare different economic systems.

2. Economics is the study of how people manage their resources.
What is Economics?
Economics is the study of how people manage their resources.

3. The Three Questions
All economics revolves around three simple questions:
What to produce?
How to produce it?
Whom do I produce it for?

4. Natural Resources
Natural resources are gifts of nature that are used to make products.
They are limited!
Examples:
Plants, Mined Metals, Animals, Oil, Coal, Minerals, etc.

5. 1. How goods are made with resources 2. How services are performed
Production
Production is:
1. How goods are made with resources
2. How services are performed
**Production of any sort requires a resource or a combination of resources**

6. What to produce? What is the product you’re making? Cars Shoes Pens
What is the service?
What is the product you’re making?
Cars
Shoes
Pens
Paper
You’re still creating and selling something…
Landscaping
Mechanics
Dentists

7. How do I produce it?
How do I make the things or services I want to sell? If I want to sell shoes I first need to figure out how to make shoes! As you watch the video, list as many things as you can that went in to making the shoe.

8. Traditional Economy What is produced? How are goods produced?
What people need to survive
How are goods produced?
Farming, hunting or gathering
How do people get products?
People make their own products or they barter (trade) with people.
****There is no money involved in a Traditional Economy****

9. ****The government COMMANDS everything****
Command Economy
What is produced?
The government decides
How are goods produced?
How do people get products?
****The government COMMANDS everything****

10. Market Economy What is produced? How are goods produced?
Whatever people are willing to buy and sell
How are goods produced?
Supply and demand. Producers decide based on what customers want
How do people get products?
It is determined by how much a person wants to – or – is able to pay

11. Mixed Economies
A mixed Economy might use elements of both market and command economics. The U.S. has a “mixed” economy because the government doesn’t decide what and how goods are produced, but it does regulate certain things, like medicine (FDA: Food and Drug Administration. Some examples are the U.K., Germany, Russia, the U.S.

12. Mixed Economy

13. Market Economy

14. 100 Economic Systems Russia 51% Pure Command Mixed Economy
United Kingdom 79%
Economic Systems
Germany 71%
Russia 51%
6th Grade- This information is meant to be used in conjunction with the 6th and 7th grade Teacher Notes. For additional resources, go to GeorgiaStandards.org. (Note: This is not an expectation for students to memorize numbers, but to understand that factors that influence specific countries to move more towards a command or market economy). The numbering system is based on The Heritage Foundation’s Economic Freedom Index 2009 The Heritage Foundation is a conservative organization that has partnered with the Wall Street Journal for over a decade to evaluate each country based on a set of 10 criteria to determine economic freedom. Update information using resources listed in the Teacher Notes.
100
Pure
Command
Pure Market
Mixed Economy

15. 100 Economic Systems Canada 81% Brazil 57% Cuba 28% Pure Command
6th Grade- This information is meant to be used in conjunction with the 6th and 7th grade Teacher Notes. For additional resources, go to GeorgiaStandards.org. (Note: This is not an expectation for students to memorize numbers, but to understand that factors that influence specific countries to move more towards a command or market economy). The numbering system is based on The Heritage Foundation’s Economic Freedom Index 2009 The Heritage Foundation is a conservative organization that has partnered with the Wall Street Journal for over a decade to evaluate each country based on a set of 10 criteria to determine economic freedom. Update information using resources listed in the Teacher Notes.
100
Pure
Command
Pure Market
Mixed Economy

16. 100 Economic Systems Australia 83% Pure Command Mixed Economy
6th Grade- This information is meant to be used in conjunction with the 6th and 7th grade Teacher Notes. For additional resources, go to GeorgiaStandards.org. (Note: This is not an expectation for students to memorize numbers, but to understand that factors that influence specific countries to move more towards a command or market economy). The numbering system is based on The Heritage Foundation’s Economic Freedom Index 2009 The Heritage Foundation is a conservative organization that has partnered with the Wall Street Journal for over a decade to evaluate each country based on a set of 10 criteria to determine economic freedom. Update information using resources listed in the Teacher Notes.
100
Pure
Command
Pure Market
Mixed Economy

17. Trade Barrier

18. Tariffs, Quotas, and Embargoes
Trade Barriers
Countries sometimes set up trade barriers to restrict trade because they want to sell their own goods to their own people. Trade barriers include:
Tariffs, Quotas, and Embargoes
They “hinder” (stop or slow down) global trade.

19. Tariffs
Tariffs are taxes placed on imported or exported goods. Tariffs cause the consumer to pay a higher price for an imported item, increasing the demand for a lower-priced item produced domestically. (at home)

20. Quotas
Quotas are restrictions on the amount of a good that can be imported into a country. Quotas can cause shortages that cause prices to rise

21. Trade embargoes forbid trade with another country.
In the past- U.S. & Russia
Present (but not for long): U.S. & Cuba

22. Human Capital Human capital
(aka-Labor) include the people with skills necessary to produce a product or perform a service.
Examples:
Lumberjacks, Doctors, Teachers, Lawyers, Factory Workers, Truck Drivers, etc.

23. Chainsaws, Trucks, Factories, Computers, Drills, Mining Rigs, etc.
Capital Resources
Capital resources are the tools and machines that humans need to turn natural resources into final products.
Examples:
Chainsaws, Trucks, Factories, Computers, Drills, Mining Rigs, etc.

24. Entrepreneurship
Entrepreneurs are those people who come up with the idea for a product or service and bring the necessary resources together to make it happen. Basically……..the people with the idea.

25. Entrepreneurs
Entrepreneurs have 2 characteristics that make them different from the rest of the labor force:
1. innovative (have creative ideas)
2. risk taker (use limited resources in an innovative way in hopes that people will buy the product)
It can be several things:
Starting your own business
Inventing something new
Changing the way something was previously done so that it works better

26. GDP: Gross Domestic Product
GDP = the total amount of final goods and services produced in one year within a country
GDP is a domestic measurement because it measures only what has been produced within the country--this doesn’t include products that are imported.
It is much better for the economy of a country to produce its own goods and services (this increases the country’s GDP).

27. Natural Resources in the Economy

28. Currency Exchange