Agenda
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Naked Economics Chapter 6
Review
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Quiz … open note
The US Economy
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Economic Systems
Economics Goals
Articles
Lecture
Homework
 Review Powerpoint for next class (online)
 Read “Current Reading Assignment” online – The Moral Case for
Capitalism (C:\Documents and Settings\SHaderlein\Desktop\summer
2012 articles\The Moral Case for Capitalism.mht)
Test # 1
 Period 2 – September 6
 Period 6 – September 10
 Period 7 – September 10
REMEMBER…Extra credit for the class if everyone attends test day!
Naked Economics, Chapter 6
Five minute review
Writing Assignment to follow
Naked Economics, Chapter 6 Writing Assignment
1. What is a significant point of the chapter?
2. What is an example of that point?
3. What is an example of that significant point
from our discussions?
Bullet points are fine
No need to restate the question
Graphs are good
Economic Systems, Questions and Goals
Societies organize themselves within different systems
to allocate resources to produce goods and services to
achieve economic goals
3 Economic
Questions
What gets
Produced?
Three Economics Systems
Free
Mixed
Centrally Planned
Market
Economy
Economy
Consumers
role
Government
for
How it gets
Produced?
Producers
Who
Consumes?
Income
Government
individuals
and
government
Government
Continuum of Mixed Economies
Centrally Planned to Free Market
Continuum of Mixed Economies
Centrally planned
Iran
North
Korea
Cuba
Free market
South Africa
France
Botswana
China
Russia
Greece
Peru
United
Kingdom
Canada
Hong Kong
Singapore
United States
Source: 1999 Index of Economic Freedom, Bryan T. Johnson, Kim R. Holmes, and Melanie
Kirkpatrick
1999? What’s happened since with the US
and with China since then? What has that
achieved?
Quotes …
The only freedom worth a damn is economic
freedom.
M.L. Meinken, author
Hunger is the stuff of which dictators are
made.
Franklin Delano Roosevelt
Econ Cartoon!
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Article
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Freedom vs. Equity
Inequity
What’s the real argument going on here?
More government involvement or less government involvement
Video…Economic Freedom
http://live.wsj.com/video/the-index-ofeconomic-freedom/20D44B43-30D4-4945B392-98639B76F804.html#!20D44B4330D4-4945-B392-98639B76F804
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Quiz
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Key Terms
Economic Goals, Systems, and Questions
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Quiz
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Key Terms
Economic Goals, Systems, and Questions
Cheat and you die
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Quiz
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Key Terms
Economic Goals, Systems, and Questions
Cheat and you get a zero
Remain Quiet
THREE MINUTE BREAK
http://www.online-stopwatch.com/bombcountdown/
Introduction to the US Economy
The US Economy
What type of economic system is the US?
The US Economy
What type of economic system is the US?
Mixed Economy…some government and some
individuals
Key terms
o
o
o
o
o
Market Failure
Public Goods
Free Rider
Transfer Payments
Externalities
Key terms
o
Market Failure
o
o
o
Public Goods
o
o
o
The free market fails to provide the good or service desired
by society…the “market failed”
Example: A park
Government provided good or service (i.e. parks, libraries,
roads, fire department).
Solves the market failure
Free Rider
o
Uses the public good but did not pay the taxes for the public
good
Key terms
o
Transfer Payments
o
o
Payments by the Government
Can be cash or in kind (non-cash) payments
o Examples
o
Cash Payments – Social Security, Unemployment
benefits
o
In Kind – Food stamps, healthcare
Why does the government provide Public Goods and Transfer Payments?
Achieve Equity and Security
CONNECTION?...Government does the Equity and Security Goals
Externalities
Event that affects you
but you had no control over it
Externalities
Event that affects you
but you had no control over it
Can be Positive or Negative
not the same as “good” and “bad”
Externalities
Event that affects you
but you had no control over it
Can be Positive or Negative
not the same as “good” and “bad”
Examples
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New Park
Hurricane
A couple questions….
1. The United States economy is a mixed economy
(a) based on the principle of a traditional economy, but allows some government
intervention.
(b) based on the principles of a centrally planned economy, with limited government
intervention.
(c) based on the principles of the free market, and allows no government intervention.
(d) based on the principles of the free market, but allows some government
intervention.
2. Government intervention in a modern economy is useful because
(a) the needs and wants of modern society are always met by the marketplace.
(b) the marketplace has many incentives to create public goods such as parks and
libraries.
(c) governments are able to provide some goods and services that the marketplace
has no incentive to produce.
(d) the marketplace provides all of its own laws.
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Homework
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Print and Review Powerpoint for next class
Read “Current Reading Assignment”
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Test # 1
 Key Terms
 Production Possibilities Curve
 Economic Goals, Systems, and Questions
 The US Economy
Period 5 – January 29
Period 6 – January 29
Period 7 – January 30
REMEMBER…Extra credit for the class if everyone attends test day!
REMEMBER…January 27 is Senior Service Day
HANDOUTS