Warm – Up
Nov 9, 2010
If you had enough
money to
purchase anything
in the world that
you want, what
would it be? Why?
( 5 mins)
Activator
What I Know (K)
What I Want to Know
(What I Think I Know)
What I Learned
• K-W-L chart graphic organizer…Students will
complete ONLY the K and W columns on their
K-W-L chart. Students will write down anything
they already know about economics under the K
column and anything they would like to know
under the W column. Teacher will allow students
an opportunity to discuss the information on their
K-W-L chart.
( 10 mins)
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.
Essential
Question
How do traditional,
market, and command
economies answer the
questions of what to
produce, how to
produce and for whom
to produce?
Work Period
Students will view a power point presentation that explains
how different economic systems operate. Students will
record their information into their cloze-notes graphic
organizer about each economic system: Traditional,
Market and Command.
• #2) Students will complete unpacking the standards
graphic organizer.
Graded Assignment
( 30 mins)
Economic Systems
All Economic Systems seek to answer the
three basic economic questions
• 1) What to produce?
• 2) How to produce?
• 3) For whom to produce?
Traditional Economies
• Basic economic
questions answered
by what has been
done in the past
• Traditions are
maintained
• Ritual, Habit, and
Custom
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
Examples of
Traditional economies
• Australian aborigines
The Mbuti in Central Africa
The Inuit of Northern Canada
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
Advantages of
Traditional economy
• There is little to no
uncertainty
• Everyone knows what
role to play
• Life is generally
stable, predictable,
and continuous
Disadvantages of
Traditional economies
• Tend to discourage
new ideas and new
ways of doing things
• Lack of progress
lowers standard of
living
Command Economies
• Basic economic questions answered by the
government (central authority)
Examples of
Command economies
• Only one command economies left – North
Korea
• All others have mixed in market economy with
their command structure (China)
North Korea
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)
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
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
Market Economies
• Basic economic
questions answered
by consumers
• Dollars = Votes
Examples of Market economies
• USA, Canada, UK, etc. etc.
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
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
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
Closing
In the Hot Seat
Prior to the beginning of class, the teacher
will prepare questions related to the
topic of study and write them on sticky
notes. Four to five questions are usually
enough. Sticky notes are placed
underneath student desks/chairs so that
they are hidden from view. At the start
of the class, inform students that several
of them are sitting on "Hot Seats" and
will be asked to answer questions
related to the topic of study for the
day. Students who have questions on
sticky notes will then take turns reading
the question and attempting to provide
an answer
( 10 mins)