1. Warm – Up November 9, 2010
In a market economy, who makes the economic
Decisions?
Farmers
Custom and habit
Government planners
Consumers and producers

2. Activator
Kagan Walk- The teacher will pose a question and play some music. You will walk around the room and reflect on the answer. When the music stops you will high five the student closest to you and then share your answer. If both students agree, you will face to face. If you disagree you will stand back to back.

3. Standards/Elements
SS7E5 The student will analyze different economic systems
a.Compare and contrast how traditional, command, and market economies answer the economic questions of (1) what to produce, (2) how to produce, and (3) for whom to produce.
b.Explain how most countries have a mixed economy located on a continuum between pure market and pure command. 
Today I will express how various economic systems operate by using my learning style to share my knowledge with my teacher and classmates.

4. Essential Question
How do traditional, market, and command economies answer the questions of what to produce, how to produce and for whom to produce?

5. Economic Systems

6. All Economic Systems seek to answer the three basic economic questions
1) What to produce?
2) How to produce?
3) For whom to produce?

7. Traditional Economies
Basic economic questions answered by what has been done in the past
Traditions are maintained
Ritual, Habit, and Custom

8. Traditional economies
Individual roles and choices are defined by the customs of elders and ancestors
These economies are usually based in societies of hunter/gatherers
Sharing is a big part of these economies

9. Examples of Traditional economies
Australian aborigines

10. The Mbuti in Central Africa

11. The Inuit of Northern Canada

12. How do Traditional economies answer the three basic questions?
1) What to produce? Whatever ritual, habit or custom dictates
2) How to produce? However ritual, habit or custom dictate
3) For whom to produce? For whomever ritual, habit or custom dictate

13. Advantages of Traditional economy
There is little to no uncertainty
Everyone knows what role to play
Life is generally stable, predictable, and continuous

14. Disadvantages of Traditional economies
Tend to discourage new ideas and new ways of doing things
Lack of progress lowers standard of living

15. Command Economies
Basic economic questions answered by the government (central authority)

16. Examples of Command economies
Only one command economies left – North Korea
All others have mixed in market economy with their command structure (China)

17. North Korea

18. How do Command economies answer the basic economic questions?
1) What to produce? Whatever the government says to produce
2) How to produce? However the government tells you to produce
3) For whom to produce? For whomever the government tells you to produce (ideally the entire society)

19. Advantages of Command Economy
Because the government has total control over production and its factors, these economies can change rapidly.
Whatever is needed most will be produced.
There is no uncertainty (people are told when and how to work)
Free education, health care, and other public services

20. Disadvantages of Command economy
Economy designed to meet needs not wants
No incentive to work hard (people don’t often lose their jobs, so they do the bare minimum to get by)
Large bureaucracy means slow decision making, raises cost of production, lacks flexibility
No reward for initiative which slows progress

21. Market Economies Basic economic questions answered by consumers
Dollars = Votes

22. Examples of Market economies
USA, Canada, UK, etc. etc.

23. Advantages of Market Economies
Adjusts to change based on consumer wants
High degree of individual freedom
Low levels of government interference
Because individuals (with money) make the decisions, everyone (with money) has a voice in the way the economy runs
Wide variety of available goods & services
Many choices = high degree of consumer satisfaction

24. Disadvantages of Market Economies
Poverty: only those with money can participate
Market does not provide for people’s basic needs. Governments must attempt to do this (think Katrina).
High degree of uncertainty people lose jobs, businesses fail
Greed based system puts profit before people

25. What is a Mixed Economy?
A mixed economy blends components of two or more of the following economic systems to varying degrees: traditional, market, and command

26. Closing Ball Toss