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The Mixed Economy Unit 3 Notes. Standard 12.2: Students analyze the elements of America’s market economy in a global setting Standard 12.6: Students analyze issues of international trade and explain how the U.S. economy affects, and is affected by, economic forces beyond the U.S. borders.

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The mixed economy unit 3 notes

The Mixed EconomyUnit 3 Notes

Standard 12.2: Students analyze the elements of America’s market economy in a global setting

Standard 12.6: Students analyze issues of international trade and explain how the U.S. economy affects, and is affected by, economic forces beyond the U.S. borders.

SWBAT: Describe and provide examples of the similarities and differences between a command, pure market and mixed economy


Warm up
Warm-Up

  • REVIEW: What are the THREE ECONOMIC QUESTIONS?

  • List them

  • Provide a summary

  • **If you don’t remember, look at your notes from last unit or get a textbook and open to page 34.


Three basic econ questions
Three Basic Econ Questions

  • What to Produce???

  • How to Produce???

  • For Whom to Produce???


How to produce
HOW TO PRODUCE???

  • For every economy, the goods are produced by private enterprise, the government, or a combination of both.

Government OR Private Businesses


  • GOVERNMENT =Command Economy

    (Pure Centrally Planned Economy)

    • Government produces everything. All resources are government owned and production is coordinated by the central plans of government.

  • PRIVATE ENTERPRISE =Pure Capitalistic

    (Pure Market Economy)

    • Private enterprise produces everything. There is no government at all.

  • BOTH = Mixed Capitalism

    (Mixed Economy)

    • Combination of government and private enterprise


Stop drop and draw
Stop, Drop, and Draw

  • Draw one big circle map and write “The Three Different Economic Systems” as your subject

  • Use a different color to symbolize each system draw two symbols for each system

  • Create a legend to color code your symbols


Read about pure market economies and pure centrally planned economies
Read about Pure Market Economies and Pure Centrally Planned Economies

  • Read on pages 35-38

  • Create a tree map with and write about the weaknesses associated with each economic systems.


Pme pcpe

Difficult enforcing property rights Economies

Some people have few resources

Some firms try to monopolize markets

No public goods

Externalities

Consumers get low priority

Little choice of freedom

Central planning can be inefficient

Resources owned by the State are sometimes wasted

Environmental damage

PME PCPE


Pure capitalism pme
PURE CAPITALISM Economies(PME)

  • PRIVATE ENTERPRISE PRODUCES EVERYTHING…meaning, INDIVIDUALS make the economic decisions…looking out for themselves and their families. Profit is the one and only motive

    • Advantages: People have the freedom to choose, provides competition so consumers get the best

    • Disadvantages: What happens to those that need help…the young, old, disabled…without the help of government?


Command pcpe
COMMAND Economies(PCPE)

  • GOVERNMENT DECIDES HOW, AND PRODUCES EVERYTHING!!!

    • Only a few countries today still have much of a command economy. (i.e.-North Korea, China)

    • Advantages: ability to quickly reroute resources in case of emergencies [war], nationwide goals can be set

    • Disadvantages: creates no incentive to work hard, lack of consumer choice, inefficient


Dear abby
Dear Abby… Economies

Dear Abby,

I am the leader of a new country and our Parliament is in the middle of a heated debate on whether to design an economy that is primarily command-oriented or pure capitalistic-oriented. What should I advise our new Parliament members to do? And Why???

Sincerely,

Confused Leader


Pure capitalistic v command double bubble map compare contrast
Pure Capitalistic v. Command EconomiesDouble Bubble Map: Compare & Contrast

  • Both a pure market economy and a pure centrally planned economy…come with problems.

  • The economy we have in the U.S. is a mixed economy, which is a combination of both government involvement and private enterprise

  • Create a double bubble map to show the similarities and differences between the two



Mixed capitalism
MIXED CAPITALISM make up??

  • BOTH GOVERNMENT AND PRIVATE ENTERPRISE

    • Most countries today are mixed!!!

      (United States, Great Britain, Mexico, France, Canada, Italy, Japan, etc….and the list goes on and on)

      WHY DO YOU THINK MOST COUNTRIES TODAY ARE MIXED??


Review advantages and disadvantages
REVIEW: make up??Advantages and Disadvantages

  • On your paper, create a chart that lists the advantages and disadvantages of the three different economic systems.

Think!!!


Review
Review: make up??

  • Draw a tree map and place the following nations under the branch you think accurately represents its economy.

    • United States, Mainland China, North Korea, Russia, Mexico


The u s economy today mixed capitalism

Government make up??

Free Enterprise -- “The Market”

The U.S. Economy Today*Mixed Capitalism*


The government s role
The Government’s Role make up??

There are 3 levels of government:

a. Federal (National)

b. State (50 Individual States)

c. Local (thousands and thousands of cities/counties)


What powers does our gov t have
What Powers Does Our Gov’t Have? make up??

  • Collect Taxes ($$$)

    -money, money, money

  • Provide Services

    -Medicare, Welfare, National Defense, etc…

  • Issue Regulations

    -laws for you and me to follow for society’s

    general welfare


The government continued
The Government -- continued make up??

By taxing, spending and regulating, a

government is able to somewhat alter the

answers to the 3 basic questions.

  • What: Production can be based on govt demand: schools, road

  • How: Government regulations can prevent the production of some goods and/or services

  • Who: By taxing, the govt redistribute these funds to help the old and the poor


The market s role
The Market’s Role make up??

  • NOT THE GROCERY STORE!!!

  • The term given to describe the exchange made between buyers and sellers

    • Banks

    • Stocks

    • Wall St.


The market
The Market make up??

By trading, buying, selling, Loaning and borrowing

money and goods, buyers and sellers are able to

somewhat alter the answers to the 3 basic

questions.

  • What: Production is largely based upon supply and demand: products, stocks, popularity

  • How: Companies aim to produce goods and services in the most efficient way possible

  • Who: Companies mainly target the large middle class.


How the market works efficiently
How the Market Works Efficiently??? make up??

Larger Market (more buyers and sellers)

More Division of Labor

More Opportunities to be Efficient

More Opportunities to make a profit


Factory activity

Factory Activity make up??

Division of Labor



Factory activity1
Factory Activity make up??

  • Today you will work in teams of four

  • You will make Yabba Dabba Dos Books

  • I will show you how to make them:

    • Take a piece of paper, cut it in half

    • Fold it in fours

    • Scarcity = Choices

    • Paper clip it together

    • When I say ‘TIME!’ – STOP, DROP, and PUT your hands on your head!!! Or I will confiscate your books.

    • We will do 4 Rounds


Factory directions cont
Factory Directions – cont. make up??

  • I need some Floor Managers

    • Your job is to count the books when the round is done, throw away their paper and give them their paper clips

    • Your job is to make sure they are not cheating

    • You can be picky – nicely folded, no tears, able to read writing

    • If they don’t do a good job, you may subtract books


Workers
Workers make up??

  • You receive wages when you are productive

  • Complete as many as you can in the time you have

  • If you complain, you won’t get paid

  • If low production, you won’t get paid

  • If poor production, you won’t get paid


Group discussion questions
Group Discussion Questions make up??

  • What did you guys do?

  • What was good about this? What was the drawback?

  • How many people cheated? Why?

  • Did you feel any loyalty to the company?

  • Is what you did good or bad for the company?


Wrap up individual
Wrap Up: Individual make up??

  • Describe your contribution to your team.

  • Which round was your team’s most productive? Why?

  • What could your team have done differently to be more efficient?

  • If this was your full time job, would you have any loyalty to the factory? Why or Why not?

  • How could you get promoted at this factory?



Evolution of the market economy
Evolution of the Market Economy (profit), the evolution of the market economy came into being by implementing the following principles!!!

  • Division of Labor (people have specific tasks…think of the assembly line)

  • Leads to Specialization (really good at one or a few products)

  • Wants to become an expert in your good, so you develop specialized capital (good technology/tools)

  • Leads to efficiency

  • Allocate your resources (sell your goods)

  • Leads to PROFIT!!!

    =>Look up each of these words for HW!


Homework
Homework: (profit), the evolution of the market economy came into being by implementing the following principles!!!

  • Section 2.3: Comparative Advantage (pp. 50-54)

    • Key Terms:

      • Absolute Advantage

      • Law of Comparative Advantage

      • Specialization

      • Barter

      • Money

      • Division of Labor

    • Questions 1-4

  • Read the handout on Specialization and answer questions 1-4 (minimum 1 pg.)


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