Transcript For whom to produce?

What is Economics?
Economics is not just money. It's businesses and
how they work. It's lemonade stands and how
many dollars they take in. It's toy collecting and
baseball card collections. It's taxes and
allowances. It's stocks and bonds. Economics is
part of almost everything you could ever think
about.
Compare how traditional, command, and
market, economies answer the 3 economic
questions of:
What to
produce?
For whom to
produce?
How to produce?
Copy this graphic organizer on your paper
Economic Systems
Command
Market
Traditional
Command Economic System
A command economy, also called planned economy, is
directly controlled by the government. The state owns all
property and controls all resources including land, labor,
and capital. Allocations of resources, supply, wages and
price are regulated by the government. Although health,
education, and transportation are available to all for little
to no cost, there is little incentive for people to work
hard. As a result, production levels are barely met and
products that are produced are usually of poor quality.
Compare how traditional, command, and
market, economies answer the 3 economic
questions of:
What to
produce?
For whom to
produce?
How to produce?
Traditional Economic System
A system in which social roles and culture determine
how goods are made, sold, and bought. Families, clans,
or tribes follow certain customs that have been handed
down from one generation to the next to satisfy their
basic needs (children often grow up to perform the
same work as their parents). In the past, societies had
elders who decided when and how to plant crops, hunt,
or move to another place. Leaders would receive goods
as tribute and they would in turn give those goods to
those who needed them.
Compare how traditional, command, and
market, economies answer the 3 economic
questions of:
What to
produce?
For whom to
produce?
How to produce?
Market Economic Systems
Based on individual choices and voluntary trade.
In a market economic system, or free enterprise system,
individuals and businesses make economic decisions.
People can choose to enter into business, or they may
sell their labor to anyone they want, and customers are
free to spend their money as they wish. In such a system,
the market determines prices and wages (Laws of Supply
and Demand).
Compare how traditional, command, and
market, economies answer the 3 economic
questions of:
What to
produce?
For whom to
produce?
How to produce?
Command Economy
Market Economy
Government controls
production, wages
and prices
People can own and
Operate a business
With little to no
Government interference
People have no say
as to what the
Government does.
Laws of supply and
demand determine
production, wages,
and prices.
Both buyers and sellers
play a part in deciding
what will be available
for sale and how
much it will cost.
Traditional Economy
Society or culture
determine what is
produced and sold.
Children usually
follow in the
occupation of
their family
members.
Supply and Demand
Definition: Producers supply goods and services and consumers demand
them. Prices in the market are determined by supply and demand.
The law of SUPPLY
says that as the price of
something increases,
producers will produce or
offer more. The opposite
is also true ... if the price
of something decreases,
producers will produce or
offer less.
The law of DEMAND
says that as the cost of
something increases,
people will demand (or
buy) less. The opposite
is also true ... if the
cost of something
decreases, people will
demand (or buy) more.
Mixed Economic System
• An economic system that allows for the
simultaneous operation of publicly and privately
owned. Economy in which both market forces
and government intervention and direction are
used to determine resource allocation and
prices. The U.S. Economy is a mixed economy;
while it relies to a great extent upon markets,
government also regulates some of the private
economy.
• Since no country has a pure command or pure
market economic system, all economies combine
aspects of both.
Explain how most countries have a mixed economy
located on a continuum between pure market and pure
command.
There is no pure market economy, because the
government regulates some things, like safety, work hours,
wages, etc…
Compare and contrast the basic types of
economic systems found in:
Brazil
Canada
Cuba
Canada
As an affluent, high-tech industrial society in the trillion-dollar class,
Canada resembles the US in its market-oriented economic system,
pattern of production, and affluent/high living standards. Since World
War II, the impressive growth of the manufacturing, mining, and service
sectors has transformed the nation from a largely rural economy into one
primarily industrial and urban.
Cuba
The government continues to balance the need for economic loosening against a
desire for firm political control. It has rolled back limited reforms undertaken in
the 1990s to increase enterprise efficiency and alleviate serious shortages of
food, consumer goods, and services. The average Cuban's standard of living
remains at a lower level than before the 1990s, which was caused by the loss of
Soviet aid. Since late 2000, Venezuela has been providing oil on preferential
terms. Cuba has been paying for the oil, in part, with the services of Cuban
personnel in Venezuela, including some 20,000 medical professionals. In 2007,
high metals prices continued to boost Cuban earnings from nickel and cobalt
production. Havana continued to invest in the country's energy sector to mitigate
electrical blackouts that had plagued the country since 2004.
Brazil
Characterized by large and well-developed agricultural, mining, manufacturing,
and service sectors, Brazil's economy outweighs that of all other South
American countries and is expanding its presence in world markets. Having
weathered 2001-03 financial turmoil, capital inflows are regaining strength and
the currency has resumed appreciating. The appreciation has slowed export
volume growth, but since 2004, Brazil's growth has yielded increases in
employment and real wages.
Economic Systems
Pure
Command
Pure
Market
Canada
81%
Cuba
28%
Pure
Command
Brazil
57%
Pure
Market
• How many basic types of economic systems are
there?
• Name the economic systems.
• Which economic system do most textbooks say is
the most common throughout the world?
• How many basic types of economic systems are
there? 3
• Name the economic systems. Traditional,
Command, Market
• Which economic system do most textbooks say is
the most common throughout the world? Mixed.
The GCEE states that mixed is not an economic
system but rather a blending of two different
types of systems.
References
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http://www.emergenttech.ca/emergenttech/images/canada_map.gif
http://www.fadiba.dk/images/brazil_map.gif
http://www.investorglossary.com/command-economy.htm
http://www.socialstudiesforkids.com/subjects/economics.htm
http://www.harpercollege.edu/mhealy/geogres/maps/worldgif/wwcommand.gif
http://www.kidseconbooks.com/html/lemonade_for_sale.html
http://www.realtrees4kids.org/ninetwelve/supply.htm
https://www.cia.gov/library/publications/the-world-factbook/geos/ca.html
https://www.cia.gov/library/publications/the-world-factbook/geos/br.html
https://www.cia.gov/library/publications/the-world-factbook/geos/cu.html