1. 3 Questions

2. 3 questions every society must answer allocation of resources What goods shall be produced? How will the goods be produced? For whom will the goods be produced? How a society answers those questions defines its economic system.

3. Think about a very small society What goods shall be produced? How will the goods be produced? For whom will the goods be produced?

4. ___________ “Market Economy” Free Enterprise Characteristics: “Command Economy” Communism Characteristics Capitalism Socialism Private Ownership of Resources Government plays a small role No central economic plan Variable Income Distribution Market supply and demand sets prices so prices may fluctuate Government Ownership of Resources Government Controls the Economy Government creates a central plan Government may redistribute income (income distribution) May use price controls to regulate market X

5. Market (Capitalist) v. Command (Socialist) ProsCons Market Command

6. Market Economy= Capitalism 18 th century economic & political ideology Adam Smith’s The Wealth of Nations Claimed people who trade with each other don’t go to war with each other. Government should not interfere with the economy or it may disrupt trade and people’s ability to prosper. “invisible hand”Smith claimed that instead of a government running an economy an “invisible hand” known as a market would. Concept is referred to as laissez-faire or “hands off” economics.

8. Karl Marx Founder of the communist ideology. He claimed that as long as there existed a business owning class, oppression would continue.

10. ___________ X MIXED ECONOMY MIXED ECONOMY Ownership of resources; private property? Governments Role in the Economy? Intervention in the Market; the role of price? Free EnterpriseSocialism Why is the United States considered a mixed economy?

11. With your partner, create a list in your notes of all the ways you can think that prove that the US is a mixed economy. Ownership of resources; private property? Governments Role in the Economy? Intervention in the Market; the role of price?

12. Homework: 2012 Index of Economic Freedom 2012 Index of Economic FreedomFrom the 2012 Index of Economic Freedom2012 Index of Economic Freedom Create a spectrum. Free Enterprise________________________Socialism –Research any 6 countries. Place them in their appropriate place on the spectrum Select one of the countries. –Write a 2-3 paragraph description of economic freedom in that country including evidence from the four broad categories. Select 3 different countries. Graph a comparison of their economic freedom through time. (It’s OK to print )

13. Homework: Create a mini-poster. For the country you’ve selected, please research the following: –Where is it? –What are the natural resources? –What is its economic system? –What is produced? –How is it produced? –For whom is it produced? What is government’s role in the economy? Does it have a “free market”? Is there private property? Role of exports and imports? –GDP –Per capita income –Population –Other Economic Facts ? Hint: User CIA World Factbook

14. United States It’s located…. It’s located…. Mixed Economy because… 300,000,000+ Visually attractive Include all info GDP =