Chapter 6 – To What Extent do Different Economic Systems Affect Quality of
Life?
Fill in the following terms:
Economics:
Economic System:
Page 194, 198
Economy:
 Canada’s major economic partner is the _____________________
Pages 202 – 204
In economics, the ideas that land (materials), labour and capital (money) limit the supply
of what people want and need is called ___________________. Resources are limited
which affects supply and demand. Resources refers to:
 money
 labour
 materials
There are three basic questions of economics about how to solve scarcity:
1. What is needed or wanted?
2. How will it be produced?
3. Who will get it?
The three basic “factors of production” interact to limit the supply of what people need
and want. These include land, labour and capital. Use the information on page 203 to
complete your notes.
Land
Labour
Capital
Page 204
In economics, there are
two parts of the economy:
Privately owned:
Publicly owned:
An economic system is a way to solve the basic problem of scarcity. There are different
economic systems. An economic system’s position on the continuum is dynamic (it
changes) and depends on the underlying values of a society and its government. The
economies of Canada and the U.S. reflect a traditional perspective on differences
between their economies. Canada has a more mixed economy and the U.S. a more
market economy. A mixed economy has more government involvement than a market
economy. A planned economy has the most government involvement.
THE ECONOMIC CONTINUUM
Planned Economy
Mixed Economy
Canada
More government involvement
Market Economy
United States
Less government involvement
PLANNED ECONOMY
The government makes all the
decisions about how to solve
scarcity. It owns and manages
the resources needed to produce
things. It plans what will be
produced and decides how to
use limited resources.
MIXED ECONOMY
Combines private ownership and
government control. For
example, private businesses own
some resources and the gov’t
owns others. In mixed economies
the level of gov’t involvement
changes depending what political
party is in power.
MARKET ECONOMY
The choices of individuals solve
scarcity. Private businesses own
and manage resources. They sell
their products to consumers, who
make their own decisions about
what to buy. Businesses succeed
if they produce what consumers
want. Gov’t does not get
involved.
Characteristics
Characteristics
Characteristics
Page 205 - 208
What is public good?____________________________________________________.
.
WORLD VIEWS DIFFER ON HOW BEST TO ACHIEVE PUBLIC GOOD
The public good and cooperation
The public good and individualism
Individuals must set aside their
individual interests to achieve what’s
best for society.
What’s best for each person
individually adds up to what’s
best for society.
This worldview values equity:
responding to others in a way that
recognizes their needs and
circumstances.
This worldview values individual
creativity and independence.
Page 206 – Canada’s Economy
THE ECONOMIC CONTINUUM
Shift Left
Shift Right
--More government involvement
--Less government involvement
--A more liberal position
--A more conservative position
The founding principle: “peace, order and good government.”

The founding principle of Canada reflects the idea of cooperation. It connects to
an agreement between Francophones and Anglophones

The idea of cooperation affects Canada’s economic system. For example,
government plays an important role in the economy, making decisions on behalf
of everyone

Canada is said to have a mixed economy because of the role government plays,
and because individuals still own private property

Canada’s position on the economic continuum is not static (does not stay the
same). It shifts from left to right depending on which political party is in
government.
When did Canada experience a Shift Left?___________________________________
Who was the Prime Minister at this time?_____________________________________
How did the Liberals stay in power?_________________________________________
______________________________________________________________________
What changes took place in the economy?
1.______________________________________________
2.______________________________________________
When did Canada experience a Shift Right?__________________________________
Who was the Prime Minister at this time?_____________________________________
How did Mulroney reduce government involvement in the economy?
1.____________________________________________________________________
2.____________________________________________________________________
______________________________________________________________________
3.____________________________________________________________________
______________________________________________________________________
Review: What is the main difference between a shift left and a shift right?
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
Looking at the Shift Left economic decisions and the Shift Right economic decisions,
what might be some perspective on these decisions?
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
Page 207 – Crown Corporations
A Crown corporation is a company owned by Canada’s government to provide products
and services to Canadians. The reasons for government to create Crown corporations
include:
1.____________________________________________________________________
2.____________________________________________________________________
3.____________________________________________________________________
Economists say Canada has a mixed economy partly because of its Crown
corporations. The United States also has some publicly owned corporations, but not as
many as Canada.
1. How has ownership of PETRO-CANADA changed?___________________________
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
2. Why might have the government sold Air Canada to private investors in 1988?_____
______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
3. Why was CBC/Radio-Canada created?____________________________________
______________________________________________________________________
4. What is the connection between CBC/Radio-Canada and collective rights in
Canada?______________________________________________________________
______________________________________________________________________
______________________________________________________________________
What is the connection to identity?__________________________________________
______________________________________________________________________
______________________________________________________________________
Page 208 – The U.S. Economy
What is the founding principle of the U.S. economy?____________________________
______________________________________________________________________

The founding principle reflects the idea of individualism. It connects to the roots
of the U.S. as a colony of Britain from the 1600s until 1776, and in fighting to
become independent of Britain from 1776 to 1783

The idea of individualism influences the economic system of the U.S. For
example, the U.S. generally values individual economic decision making, with
little government involvement

The U.S. is often said to have a market economy, because of its emphasis on the
role of the individual, versus the government, in economic decisions

The position of the U.S. on the economic continuum shifts right and left,
depending on the political party in power.
1933 – 1944: An Example of a Shift Left
__________________ ___________________ became president of the United States
in ____________, during a worldwide economic crisis called the __________________
______________________. Millions of people were out of work, the president
responded with a policy called the _____________ _____________. It established:
1.____________________________________________________________________
2.____________________________________________________________________
3.____________________________________________________________________
______________________________________________________________________
1980 – 1988: An Example of a Shift Right
In ______________, __________________ _______________ became the president
of the United States. Like Prime Minister _________________, he wanted the
government less involved in the economy. He took such steps as:
1.____________________________________________________________________
2.____________________________________________________________________
______________________________________________________________________
The two political parties in the United States are the _________________________ and
the ________________________.
How do Market Economies Work?
Mixed and Market
Economies
Individual choices
of consumers are
an important
economic force
Individual choices
add up to create
overall economic
decisions for society
Market Economies
Consumer choices drive
all economic decision
making.
A consumer is_________________________________________________________
Page 210 – Supply and Demand
How do consumer choices “add up” in mixed and market economies? The two
principles of a market economy are supply and demand and competition. Supply and
demand connect through a cause-and-effect relationship related to price. Supply and
demand affect quality of life because they affect the prices of products we buy, the
availability of products, and jobs connected to created products. Supply is about
producing things people want – it involves producers. Demand is about what people
want. It involves consumers.
TERMS
Supply:
Demand:
Producers:
Consumers demand
Producers supply
Competition:
Equilibrium:
Fill in the blanks using the charts on page 210 and 211.

In a state of___________________, the supply of a product can meet the
demand for a product at a particular price.

When _______________ for a product goes up, it means more and more
__________________ are buying the product. As _____________________
buy the product, the ______________ or availability of the product
________________. If consumers are competing for the limited supply of a
product, the price will ________________.

If the price goes up, what happens to demand for the product?_______________
________________________________________________________________
This drives down demand for the product. When demand goes down, what
happens to the supply availability?_____________________________________
________________________________________________________________

Supply goes up so more of the product is available. If there are more products
available than what consumers want to buy, __________________ cut prices
to encourage ________________ to buy more. The lower price encourages
consumers to buy more, so ______________ for the product goes_________.
This helps restore______________________. Producers want to supply as
much of a product as consumers will buy, at a price that allows producers to
make the most profit possible. This tends to make supply, demand and price
stable over time.