Quick Draw: Pizza Party…its just pizza how hard can it be? How many and what toppings? How many Pizzas should we order for the class??? The School???? All high schools in Georgia??? All high schools in the USA???? Traditional Market Command Economic Systems of the World. What are the major types of Economic systems ? How does each answer the 3 Basic Economic Questions? Traditional Economic Systems Tradition, Tradition, Tradition What, how and for whom to produce are answered by ritual, habits, customs Tribal Societies Across the world Communal living, little private property Advantages Disadvantages Methods Work Subsistence living Low standard of living Discourages new ideas Never changes Command… ex: Communism Gov’t answers 3 Basic Economic Questions No Private Property Total Government Control Rights Government owns all resources!!!!! Strengths Weaknesses Quick Changes Basic needs met Central Planning Consumers Wants Ignored Everyone know role No incentives to work Massive Bureaucracy Day to Day Inflexibility The Soviet Economy What is the reason why people didn’t work hard? Circle the words that fit with Command Economies Lots of Choices government housing Economic freedom Karl Marx Merit Pay Joseph Stalin Cuba Incentives to work Basic needs met Get what you need Slow to change No Technology Equal distribution of Wealth Happy Consumers Government control Private Property Fast to change Day to day flexibility Central Planning North Korea Tribes Adam Smith Expansion of Communism C O M M A N D Market Economy: Capitalism USA, Japan, UK, South Korea, South Africa, Canada Mixed Economy KNOW YOUR ROLES!!!!!!!!!!!!!!!!!!!! Modified Private Enterprise Economy The Entrepreneur The Government The Consumer “The Spark plug of the economy” -risk takers -innovators -they organize the 4 factors of production Protector of consumers Consumer Sovereignty rights and freedom, private - rulers of the market property - Answer the 3 basic Provider of services like questions national defense, welfare, education, public goods Consumer of resources 2nd largest only to citizens Regulator of markets to ensure competition and safety, redistribute income, limit market failures Promoter of National Goals CONSUMER SOVEREIGNTY WE RUN THIS ECONOMY!!!!!!!!!!!! Market economies… ex: Capitalism People/individuals answer the What, How, For Whom to Produce Adam Smith- laissez faire “leave it alone” Invisible hand of self interest Strengths Weakness Flexible Slow to change Individual Freedom Allows Failure Winners/losers Decentralized decision making Large Variety of Products High consumer Satisfaction Private Property Rights Time to Think…… How would your life be different if you lived in a market economy?? It would not be any different because you currently live in a Market Economy….Silly Stop, Collaborate and Listen What are the similarities and differences of market and Command Economies? Command What would a mix of command and market look like? Market China, Vietnam, Sweden, Venezuela LETS MIX THINGS UP WITH SOCIALISM!!!!!! -Socialism is a blend of communism and capitalism. -The 3 Basic Economic Questions are answered by the government and individuals -The government owns and controls only key resources and industries while individuals own the rest of the resources and have private control of most businesses -Basic needs of the people are met by the government -People pay high taxes to fund things like healthcare, insurance, and other social services Limited -Economic Freedom -Voluntary Exchange -Profit Motive -Private Property Rights -There is a shared control of the economy between the government and people. FILL IN THE BLANKS Economic System Traditional Market/ Capitalism Command/ Communis m Socialism Private Ownership of resources Profit Motive Consumer Sovereignty Competition Government Regulation redistributio n of Wealth Home work: Letter to a friend Boys, You are living in a Command economy, girls Traditional economic systems. Write a letter to a friend living here in the USA. Discuss how your lives are different. Discuss what you like and do not like about your economic system and if you would prefer to live in the USA. ¾ to 1 page in length Warm- UP - Review Describe what each of the following would look like in a traditional, command, and market economy What How For do you produce? do you produce? whom?