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Bead Game Simulation. Reflection Questions. Which system had the most incentive to work? Why? Which system had the least incentive to work? Why? Which system was the most inefficient by modern standards? Explain. Which system would you like to live in, why?. Standards Mastery Sheet.

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reflection questions
Reflection Questions
  • Which system had the most incentive to work? Why?
  • Which system had the least incentive to work? Why?
  • Which system was the most inefficient by modern standards? Explain.
  • Which system would you like to live in, why?
slide4

Economic System

  • Economic System – method used by society to allocate/distribute the scarce resources, in order to provide for the wants and needs of the people
slide5

Three Economic Questions

  • What goods and services should be produced?
  • How should these goods and services be produced?
  • For Whomto produce them for?
slide6

Four Economic Systems

  • Traditional economy – relies on habit, custom, or ritual to decided the 3 economic questions
  • Market economy – economic decisions are made by buyers and sellers trading freely.
  • Command Economies – in a centrally planned economy, the central government decides how to answer the three economic questions.
  • Mixed Economies – most modern economies are mixed economies, market-based economic systems in which government plays a role in the market.
slide8

Economic Freedom

  • Economic Freedom - freedom to make choices free of the government
  • Individual – where to work, study, consume
  • Business – what, where and how to produce
slide9

Economic Efficiency

  • Economic Efficiency - making the most of scarce resources, using your resources wisely and productively
  • Technological innovations allow society to be more productive
  • Humans to robots
slide10

Economic Security

  • Economic Security - government will provide a safety net in times of economic downturns
  • Social Security, welfare, unemployment checks, etc.
slide11

Economic Predictability

  • Economic Predictability - knowing that goods and services will be consistently available
  • Gas, food, energy, etc.
slide12

Economic Equity

  • Economic Equity - Fairness, being paid according to your skill level, not being discriminated against
  • Lebron James is higher paid than a teacher
  • A teacher is higher paid than a cashier at Wal-mart
slide13

Economic Growth

  • Economic Growth – improving the economy from year to year, improving standard of living as measured by GDP.
  • Individual – better jobs, nicer homes, newer cars….better stuff!
  • Business – produce more, increase customers, open new factories, etc.
slide14

Economic Innovation

  • Economic innovation – improving upon existing technology in order to improve efficiency.
  • Walkman to the iPhone, Record Player to Digital Media
slide15

Additional Goals

  • Additional Goals – future goals for a society
  • Environmental protection, full employment, universal medical care, etc.
economic goals and societal values poster project pgs 26 27
Economic Goals and Societal Values Poster Project – pgs. 26-27
  • Poster Requirements:
  • Title - Economic Goals and Societal Values
  • Summary Statement – “The Economic Goals and Societal Values provide a basic framework for each society and their attempts to provide for their people.”
  • Pictures of each goal represent each of the economic and social goals.
    • 1 if working alone
    • 2 if working with a partner
    • 3 if working with a group of 3
  • Label, describe and summarize each picture
  • Economic Freedom
  • Economic Efficiency
  • Economic Security
  • Economic Predictability
  • Economic Equity
  • Economic Growth
  • Economic Innovation
  • Additional Goals

Economic Efficiency

Picture Summary: This picture represents assembly line production at an automobile manufacturing plant. This shows how the division of labor and specialization can increase efficiency.

economics goals and societal values poster project pg 23 27

Economic Goals and Societal Values

Economics Goals and Societal Values Poster Project pg. 23 - 27

Summary Statement:

The Economic Goals and Societal Values provide a basicframework for each society and

their attempts to provide for

their people.

Economic Predictability

Economic Security

Economic Efficiency

Definition: picture represents an efficient use of resources through assembly line production

Economic Innovation

Economic Growth

Additional Goals

Economic Freedom

Economic Equity

  • Poster Requirements:
  • Title - Economic Goals and Societal Values
  • Summary Statement – Purpose of economic and Societal Values
  • At least 8 pictures to represent each of the Economic Goals and Social Values
  • Label, definition and picture description for each of the 8 Economic Goals and Societal Values
review economic goals
Review Economic Goals

1. Economic Freedom

2. Economic Security

3. Economic Innovation (Efficiency)

4. Economic Efficiency (Innovation)

5. Economic Growth (Innovation)

6. Economic Predictability

7. Additional (Future) Goals (Equity)

8. Economic Equity (Growth)

activator
Activator
  • Imagine that you are walking into Walmart. List 3 items that you could purchase and the departments that you would find them in.
slide20

The Free Market

  • Market – buyers and sellers meet to exchange goods and services
  • Market Economy – economic decisions are made by consumers and businesses based on buying and selling of goods and services
    • All resources are privately owned
    • Any income derived from selling resources goes exclusively to the owner
    • The government has no role
slide21

Role of the Consumer

  • Consumer Sovereignty - in a free market, consumers determine the goods that are produced; this makes them "sovereign" over production in an economy.
  • “Ruler” of the market; expressed through a dollar vote for products when we make purchases. “The customer is always right”.
  • When consumers buy products, their “dollar vote” signals to producers what to make and how much.
specialization
Specialization
  • Specialization – the separation of tasks within a system; people focus on a specific purpose/task
  • Division of Labor – Workers perform fewer tasks in order to operate more efficiently
specialization1
Specialization
  • Specialization – the separation of tasks within a system; people focus on a specific purpose/task
  • Division of Labor – Workers perform fewer tasks in order to operate more efficiently
slide24

Specialization Examples

  • Glynn Academy – teachers in different departments
    • Each teacher can master their content
    • Present it in the most efficient manner possible

Social Studies

Science

English

Math

slide25

Specialization Examples

Rancher

Slaughter House

Meat Cutter

Final Good (Output)

Consumer Good

Publix Worker

slide26

Specialization and Efficiency

  • Productivity – average amount of output (good or service) per unit of input (labor, machine, etc.)
    • Increased productivity means to do more with less
    • Capital investments allow increased efficiency
slide27

Specialization and Efficiency

  • Productivity – average amount of output (good or service) per unit of input (labor, machine, etc.)
    • Increased productivity means to do more with less
    • Capital investments allow increased efficiency
slide28

Productivity

Mary looks over reports on four of her workers. Jack made 25 baskets in 5 hours. Walter made 36 baskets in 6 hours. Rudy made 40 baskets in 10 hours. Sam made 22 baskets in 4 hours. Jim made 50 baskets in 10 hours. Who has the greatest productivity?

Jack 25/5 = 5 Baskets per hour

Walter 36/6 = 6 Baskets per hour

Rudy 40/10 = 4 Baskets per hour

Sam 22/4 = 5.5 Baskets per hour

Jim 50/10 = 5 Baskets per hour

Walter has the greatest productivity

slide29

Productivity Creates Wealth

3rd World Countries

Developed Countries

29

slide30

Households and Firms

  • Household – Person or group of people living in a residence
    • Consumers - use the finished goods and services (outputs) to satisfy wants and needs
  • Firm – business, organization that uses factors of production (inputs) to produce a product, which it then sells
    • Suppliers – transform “inputs” (F.O.P.) into “outputs” (products)
slide31

Product Markets

  • Product Markets – Households and firms interact; producers sell their goods and services to consumers
    • Households are buyers of goods and services
    • Firms are sellers of goods and services (outputs)
slide32

Factor Markets

  • Factor Markets – the markets where productive resources (F.O.P)/Inputs are bought and sold
    • Labor - Firms (businesses) hire workers and pay them salaries
    • Land - Purchased/rented land
    • Capital - Use money from households (savings, investment, etc) to purchase capital goods
slide33

Circular Flow Model of Economic Activity – shows the flow of money and goods/services from and to businesses and households

Consumer Spending

Business Income/Revenue

  • Product Market
  • Market for Goods and Services
  • Firms sellHouseholds Buy

Consumer Goods and Services

Final Goods and Services Sold

  • Households
  • Buy and Consume
  • Goods and Services
  • Own and sell the F.O.P
  • Firms(Business)
  • Produce and sellGoods and Services
  • Hire and use F.O.P.

Land, Labor, Capital - provided by household

Inputs for Production (F.O.P.)

  • Factor MarketMarket for F.O.P
  • Households sell
  • Firms buy

Income to Households/Individuals

Payment for F.O.P. – Rent (Land) Wages (Labor), Interest (Capital), Profit (Entrepreneurs)

slide34

Application Questions

  • In the factor market, what do businesses provide households?
  • The flow of goods and services in the product market is represented by which firm and products on the model below?
  • When you apply for a job at the local Starbucks which market are you in?
  • Which color arrows represent the flow of money; what color arrows represent the flow of inputs and outputs.

Income/payment the F.O.P

Starbucks/Coffee

Factor

Blue/Tan

slide35

Daily Assignment - Circular Flow Model of Economic Activity

Consumer Spending1. _________________________

  • Business Income
  • _________________________

Product Market

Goods Purchased 1. ______________________________

2. _______________________________

Goods Offered1. ___________________________

2. ___________________________

  • Household
  • ________________________

FirmFirm 1. _____________________________

Firm 2. _____________________________

Input for Production

1. ___________________________

Factor of Production Offered1. ___________________________

Factor Market

Weekly Income1. __________________

Payments for F.O.P

1. _________________

slide36

Daily Assignment - Circular Flow Model of Economic Activity

Consumer Spending1. _________________________

  • Business Income
  • _________________________

Product Market

Goods Purchased 1. ______________________________

2. _______________________________

Goods Offered1. ___________________________

2. ___________________________

  • Household
  • ________________________

FirmFirm 1. _____________________________

Firm 2. _____________________________

Input for Production

1. ___________________________

Factor of Production Offered1. ___________________________

Factor Market

Weekly Income1. __________________

Payments for F.O.P

1. _________________

slide37

Circular Flow Model of Economic Activity

Consumer Spending1. _________________________

  • Business Income
  • _________________________

9.49

9.49

Product Market

Goods Purchased 1. ______________________________

Goods Offered1. ___________________________

2. ___________________________

3.___________________________

Tacos

BurritosFajitas

Fajitas

  • Household
  • ________________________
  • ________________________

FirmFirm 1. _____________________________

Firm 2. _____________________________

Elisa

Marcella

Cilantros

Books a Million

Input for Production

_________________________

_________________________

________________________

Factor of Production Offered1. ___________________________

Stockers

Coffee Sellers

Cashiers

Labor/Salesperson

Factor Market

Payments for F.O.P

________________

________________

________________

Weekly Income1. __________________

200

3000- Lease

2200 – Electric

400 - Water

slide39

American Free Enterprise

Economic Freedom

Competition

Private Property Rights

Self-Interest

Voluntary Exchange

Profit Motive

Description

Description

Description

Description

Description

Description

Example

Example

1.

Example

1.

Example

1.

Example

1.

Example

1.

slide40

Economic Freedom

  • Description - Individuals’ right to choose your occupation and what to buy.
    • Firms’ right to hire or produce.
    • The right to conduct yourself with little government interference.
  • Examples:
  • 1. I had the freedom to become a teacher and a coach; I can buy whatever I want.
  • 2. Firms range from automakers to fast food.
slide41

Voluntary Exchange

  • When individuals willingly engage in a transaction where both parties benefit.
  • Allows people to decide what and when they want to buy and sell, rather than forcing them to buy and sell at particular times or specific prices
  • Examples:
    • When I get a haircut, I get a fresh look, Sportsclips gets my money
    • When I buy gasoline, I get energy for my car, the firm gets my money
slide42

Private Property Rights

  • Description – Individuals and businesses have the right to buy and sell as much property as they want
    • Property owners can prohibit others from using their property
    • The fifth amendment protects us from the federal or state governments taking our property for their own use.
  • Examples:
    • Households and firms are encouraged to own property and enjoy the protection of the property
    • Firms can own and operate their business with limited interference from the government
slide43

Profit Motive

  • The force that encourages people and organizations to improve their material well-being
  • Examples
    • Many people in our society are driven by the desire to make money, which ultimately benefits the market
    • People in the U.S. are rewarded for innovations and efficiency via cash incentives
slide44

Competition

  • Competition – efforts among sellers/producers to attract consumers at various prices
    • At the heart of market economic philosophy
  • Examples:
    • Mcdonalds vs. Burger King
    • Walmart vs. Target
slide45

Circular Flow Model of a Mixed Economy

Consumer Spending/Investing

Business Income/Revenue

Product Market

Goods and Services Sold

Taxes

Goods and Services Purchased:

Taxes

Households

Expenditures

Expenditures

  • Firms

Land, Labor, Capital, Entrepreneur

Inputs for Production (F.O.P.)

Taxes

Taxes

Factor Market

Income to Households/Individuals

Payment for F.O.P. – Wages, rent, capital goods

slide46

Role of the Government in a Market Economy

  • Government acts an informer, protector, provider, and regulator
  • Government has the responsibility to protect property rights, contracts and other business activities
slide47

Role of the Government in a Market Economy

  • Government has the responsibility to protect property rights, honor contracts, protect against discrimination, monopolies or unfair business practices
slide48

Role of the Government as Informer

  • Role of the Government as Informer:
    • Make sure that producers provide consumers with accurate information
  • Consumers use govt. info. to protect themselves from dangerous products and fraudulent claims.
slide49

Role of Government as Regulator

  • Role of government as a protector:
  • Federal government acts to preserve competition, regulates airlines, communications, banking, etc.
  • Though they do not control it, they impose various restrictions on the private market
    • Gas stations, must dispose of used motor oil properly
    • Zoning laws, prevent homeowners from running businesses out of their homes
slide50

Negative Effects of Regulation

  • Government regulation can have negative effects on businesses and consumers
  • Negative effects:
    • Government rules can increase the cost of business
    • Stifled competition can lead to high prices
    • Increase of governmental spending can lead to higher taxes
slide51

Government as a Provider

  • Public sector- the part of the economy that involves the goods provided by the government
  • Private sector- the part of the economy that involves the goods provided by private firms
slide52

Public Goods and Services

  • Public Good/Service - A shared good or service for which it would be impractical to make consumers pay individually and to exclude nonpayers.
    • Education, military, National Park, Snow Removal, Fireman
slide53

Redistribution of Income

  • When the government takes from one group and reallocates to another group
  • Welfare, Social Security, Unemployment, Food Stamps, etc.
slide54

Market Failure

  • The market, on its own, does not distribute resources efficiently, choices made by individuals determine what goods get made, how, and how much
    • Free riders, monopoly, roads and bridges in a sparsely populated area, etc.
slide55

Negative Externalities

  • Negative Externality – negative effects experienced by people that had no part in the consumption of a good or service
    • Cigarette smoker, chemical waste dumping, foreclosures and property values, etc.
slide56

Negative Externalities

  • Negative Externality – negative effects experienced by people that had no part in the consumption of a good or service
slide57

Positive Externalities

  • Goods/services that generate benefits to many people, not just those who pay for the goods
    • Education, better technology, medicine, etc.
slide58

Free-Rider Problem

  • A free rider is someone who would not choose to pay for a certain good or service, but who would get the benefits of it anyway if it were provided as a public good
slide59

Application Question

  • Write an example of a negative and positive externality.
  • What kind of government regulation could be used to eliminate your negative externality?
slide60

Command Economies

  • Command – central authority owns and operates the Factors of Production
  • Centrally Planned Economy – central government answers the three economic questions; WHAT to produce, HOW to produce, and FOR WHOM to produce
    • Oppose private property, free market pricing, economic freedom
slide61

Socialism and Communism

  • Karl Marx – German social philosopher that studied economic systems in Europe
    • Communist Manifesto – written by Marx and Frederick Engels became basis for modern-day command economies
    • Thought capitalism would fail because it put too much wealth in the hands of few and left everyone else poor
    • Believed in a “no-class” system, where all share in wealth/power
  • Socialism – distribution of wealth and F.O.P. equally amongst society
  • Communism – political and economic system with centralized economic decision-making
  • Authoritarian Government – exact strict obedience from their citizens; do not allow individual freedom
slide62

Chapter 2 Section 2 – Daily Assignment

Economic Profile Adam Smith pgs. 33

What was Adam Smith’s ethnic and professional background?

What was the name of the book that he published; when was it published?

What did Smith identify in the book?

What did he assert about specialization and division of labor?

What did he believe about the role of government in the economy?

Define the French term Laissez Faire; why did Smith believe in Laissez-Faire economics?

What is meant by his metaphor of the Invisible Hand?

How do both consumers and businesses benefit from this philosophy?

  • Scottish, Philosopher, Professor
  • Wealth of Nations
  • Land, labor and capital as the factors of production that generate wealth
  • Productivity increases through specialization
  • Government must leave individuals as free as possible to pursue their interests
  • Individuals try to pursue their own self-interest will benefit all of society
  • Let them do as they please
  • Consumers buy what they want, producers supply for profit
slide63

Chapter 2 Section 3 – Daily Assignment Questions “The Former Soviet Union” pgs. 36-38

How did the Soviet Union arise?

Where did Soviet planners allocate the factors of production?

How did the Soviet Union control agriculture?

What three industries did Soviet Planners favor?

How did the Soviet Union view entrepreneurial endeavors?

What was the quote used by Soviet consumers as a joke?

Why were Soviet Consumers’ left unsatisfied?

Page 39 – Russia in Crisis

How did many Russians initially respond to the Communist collapse?

What happened over the next decade?

How did Russia deal with corruption?

What were some characteristics of Russia’s financial problems?

What evidence can be seen that success is in sight?

do now ch 2 section 3
Do Now Ch 2 Section 3
  • Scenario 1

You have two cows.

You trade one to your neighbour for a bull.

You only produce what you need to survive.

  • Scenario 2

You have two cows.

The State takes both and gives you just enough milk to live

  • Scenario 3

You have two cows.

You sell one and buy a bull.

Your herd multiplies, and your wealth grows.

You sell your herd and retire on the income.

  • What economic system matches each scenario?
  • Which scenario do you think is the most ideal and why?
  • Which scenario do you think sounds the most like the United States? Why?
  • What countries do you know of that could fall into scenario 2.
slide65

Whatever is necessary for the tribe to survive.

Whatever the government tells them to produce.

Whatever is in demand by the consumers.

The most efficient method possible; technological innovations.

Based on tradition, habit and custom; the way its always been done.

Based on the government.

Consumers that are willing to purchase.

Whoever the government tells them to produce it for.

The tribe

daily assignment comparing economic systems
Daily Assignment – Comparing Economic Systems

Central African Mbuti

North Korea

United States

Canada

Japan

South Korea

Singapore

Germany

France

Great Britain

Western Europe

Australian Aborigines

Cuba

Inuits of Canada

China

Examples

Former Soviet Union

Everyone knows their role in society/economy

Change economic direction in a short time

Adjust to change over time

Individual economic freedom

Limited government interference

Decision-making is decentralized

Variety of goods and services

High degree of consumer satisfaction

Advantages

Health and public services are available at little or no cost (regardless of income)

Economic questions are answered based on tradition

Does not provide basic needs for everyone

Lack of public goods by private markets

High degree of uncertainty, job loss, competition

Market failures (monopoly)

Not designed to meet wants of consumers

Discourages new ideas

Does not give incentive to work hard

Disadvantages

Large decision-making bureaucracy

Lack of progress, lower standard of living

Lack of economic flexibility

Lack of economic freedom, profit motive

slide67

What traditions are mentioned regarding American society?

  • List some additional traditions that you have in your family.
  • How did the Inuit exemplify a traditional economic system?
  • How did the State Planning Commission determine the direction of the Soviet economy?
  • What shortcut did Soviet workers take in order to fill their quotas; what did it lead to?
  • How did the State Planning Commission respond to a shortage of male workers?
  • Describe what a “dollar vote” indicates.
  • Describe how the market adjusted from the 1970s gas shortage, to the 1980s.
  • What examples are provided of the various goods and services provided in a market economy?
  • How do both the majority and minority end up satisfied in a market economy?
  • What are the three conditions that must be met to ensure that market economies do not fail?
  • Thanksgiving, bouquet toss, shaking hands
  • Open one present on Christmas Eve
  • Share the spoils of the hunt
  • Determined the needs based on governmental decisions
  • Made their products heavier
  • Made the women go to work
  • Spending money to show firms what to produce
  • People bought less gas-guzzling cars and bought more fuel-efficient ones
  • Internet, electric dog collars, Cable TV
  • Both can get what they want
  • Competition, Flexibility, Access to information
slide68

Modern Economies

  • Free Enterprise – competition in the marketplace is allowed to flourish with no interference from government
  • Modified Free Enterprise (mixed economy) – businesses are free to compete with some government regulation/intervention

Centrally Planned Free Market

Mexico France

South Africa

Poland Japan

  • United Kingdom Hong Kong
  • Canada Singapore
    • United States

Iran

China

North Korea

Cuba

slide69

Laissez Faire in a Modern Economy

  • Laissez Faire – no government intervention in the economy
  • Some government intervention is necessary in the economy; some needs are difficult to answer in the marketplace
      • National defense, roads and highways, education, etc…
      • Government acts a protector, regulator and overseer of economy
slide70

Government Money

  • Taxes from both households and businesses
    • Income tax, state income tax, social security, Medicare/Medicaid, unemployment insurance, etc.
slide71

Government in the Factor Market

  • Government purchases land, labor, and capital from households
  • United States gov’t pays 2.8 million employees $9.7 billion for labor
slide72

Government in the Product Market

  • Government purchases goods and services from firms (businesses)
      • Office supplies, telephones, computers, etc.
daily assignment economic goals
Daily Assignment – Economic Goals

Yes – specialization, wise use of resources leads to profit

No – Many resources go unused, Cuba 50% of fertile land is not utilized

Yes/No – Tribal living does not waste resources/lack modern standards of efficiency and growth

Some – your job and provisions are guaranteed by your tribe

Yes - employment and government sponsored programs are assured

No – a pure market economy prescribes to laissez faire.

(mixed economies have some safeguards)

No – in most cases unpredictable, because resources can become scarce

Yes – most market economies have high levels of resource predictability

No – command economies struggle to meet the needs of the consumer

No – based on customary means of production not fair pay for acquired skills

Yes – fairly paid based on your skills

No – private incentive, profit motive do not exist

Yes - a fast rate due to competition and profit motive

Slow - lack of growth because of a lack of efficiency and profit motive

No - lack of growth due to a lack of productivity and innovation

Limited – lack of innovation because of a lack of profit motive

Yes – innovation and technology leads to profit

No – lack of modern innovations

slide74

Chapter 2 – VIS Terms

  • Traditional Economy
  • Command Economy
  • Market Economy
  • Market
  • Free Market
  • Specialization
  • Division of Labor
  • Household
  • Consumer
  • Firm
  • Supplier
  • Product Market
  • Factor Market
  • Centrally Planned Economy

15. Socialism

16. Communism

17. Authoritarian

18. Laissez-Faire

Junk!!!

daily assignment group presentations
Daily Assignment Group Presentations

Using the Chart Below, identify each groups Economic Goals and

Societal Values and the picture they used to represent each goal.

include on your test
Include On Your Test
  • Name
  • Date (1-30)
  • Class Period
  • Chapter 2 Test
  • ID: A, B, C

Junk!!!

due today
Due Today
  • Economic Systems D.A.
  • Video Questions - North Korea
  • Circular Flow (Elisa and Marcella)
  • Comparing Economic Systems - Reflection Questions and Chart
  • Free Enterprise Flow Chart
  • Study Guide Chapter 2
  • CW Puzzle
  • Terms Ch. 2
  • Daily Tens (9)
  • Essential Questions (3)
  • Notes
  • Test Standard Sheet (include original test answers + corrections)

Junk!!!

study guide chapter 2
Study Guide Chapter 2
  • Economic System
  • What to produce, How to produce them, Who to produce them for
  • Economic: efficiency, freedom, security, predictability, equity, growth, innovation, additional goals
  • Tradition, custom, ritual, habit
  • Central planners dictate the what, how, for whom
  • Buying and selling of households and firms
  • Market
  • Market economy
  • Capitalism
  • Households and Firms
  • Input is something used to produce and output, which is a final good or service
  • Product
  • Factor
  • Adam Smith, Wealth of Nations
study guide chapter 21
Study Guide Chapter 2
  • Be limited in its role in the economy, “Let them do as they please”.
  • Invisible Hand
  • See Circular Flow
  • a) Product
    • when it changed hands from the household to the firm
    • Factor, labor
    • Grills, hostesses, cashiers
    • Factor
  • Karl Marx, Communist Manifesto
  • That it would fail because it put too much money in the hands of the rich and not in the hands of the poor
  • Communism, Socialism
  • Authoritarian
  • Economic Freedom
  • Property Rights
  • Profit Motive
  • Voluntary Exchange
  • Competition
include on test
Include on Test
  • Name
  • Date (9-4)
  • Class Period
  • ID: A, B or C
  • Test Economics Systems
study guide chapter 3
Study Guide Chapter 3
  • Economic Freedom
  • Property Rights
  • Profit Motive
  • Voluntary Exchange
  • Competition
slide82

Extra Credit

  • Give an example of a positive and negative incentive.
  • Explain why the United States is not a true “pure market/free enterprise” system.
slide83

Extra Credit

  • Which type of economic system do you think is the best method for allocating scarce resources? Explain why.
  • Other than the goal that you identified on your test, write the one that you think is the next most important. Explain why.
economic goals and societal values pgs 23 27
Economic Goals and Societal Values - pgs. 23-27

Manufacturer knowing the best way to use resources wisely (Assembly Line)

Making the most of scarce resources

Freedom from government intervention in the production and distribution of goods/services

Working where you want, spending money the way that you want, owning a business, etc.

Knowing that goods and services will be available, payments made on time, government will provide a safety net in times of economic downturns

Security – Unemployment Checks, Social Security, Stimulus Money

Predictability – gas at gas pumps, food at store

Lawyers earn more than nurses, computer programmers more than truck drivers

Fairness, being paid according to your skill level, not being discriminated against

Agricultural age to industrial age to information age. Innovations in computers, communication.

Economic growth refers to improving standard of living and GDP. Innovation, improving existing technology.

Environmental protection, full employment, universal medical care.

Future goal for society.

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Circular Flow Model of Economic Activity

Consumer Spending/Investing

Business Income/Revenue

Product Market

Goods and Services Purchased: Caramel Frappuccino

Goods and Services Sold

Households

  • Firms

Land, Labor, Capital, Entrepreneurs

Inputs for Production (F.O.P.)

Factor Market

Income to Households/Individuals

Payment for F.O.P. – Wages, rent, capital goods

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Essential Question #1 +2

How do each of the economic systems answer the three economic questions?

How does the Circular Flow model show a market economy?

  • Tradition – based on habit, ritual, custom
  • Market - based on buyers and sellers
  • Command – based on central planners/government
  • Mixed – market based with some government regulation
  • Flow of money from households to firms (product market), firms to households (factor market).
  • Flow of final goods and services (outputs) to households (product market), and factors of production (inputs) to the firm (factor market).

3. What do the economic and social goals help us to understand?

  • Explain how each society provide goods and services for their people in light of scarce resources.
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Essential Question #1

How do each of the economic systems answer the three economic questions?

  • Tradition – based on habit, ritual, custom
  • Market - based on buyers and sellers
  • Command – based on central planners/government
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Essential Question # 3

3. What do the economic and social goals help us to understand?

  • Explain how each society provide goods and services for their people in light of scarce resources.
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Vince Lombardi “What it Takes To Be Number 1”

"Winning is not a sometime thing; it's an all the time thing. You don't win once in a while; you don't do things right once in a while; you do them right all the time. Winning is a habit. Unfortunately, so is losing. There is no room for second place. There is only one place in my game, and that's first place. I have finished second twice in my time at Green Bay, and I don't ever want to finish second again. There is a second place bowl game, but it is a game for losers played by losers. It is and always has been an American zeal to be first in anything we do, and to win, and to win, and to win. Every time a football player goes to play his trade he's got to play from the ground up-from the soles of his feet right up to his head. Every inch of him has to play. Some guys play with their heads. That's O.K.You've got to be smart to be number one in any business. But more importantly, you've got to play with your heart, with every fiber of your body. If you're lucky enough to find a guy with a lot of head and a lot of heart, he's never going to come off the field second.

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Vince Lombardi “What it Takes To Be Number 1”

  • Running a football team is no different than running any other kind of organization-an army, a political party or a business. The principles are the same. The object is to win-to beat the other guy. Maybe that sounds hard or cruel. I don't think it is. It is a reality of life that men are competitive and the most competitive games draw the most competitive men. That's why they are there-to compete. To know the rules and objectives when they get in the game. The object is to win fairly, squarely, by the rules-but to win. And in truth, I've never known a man worth his salt who in the long run, deep down in his heart, didn't appreciate the grind, the discipline. There is something in good men that really yearns for discipline and the harsh reality of head to head combat. I don't say these things because I believe in the "brute" nature of man or that men must be brutalized to be combative. I believe in God, and I believe in human decency. But I firmly believe that any man's finest hour, the greatest fulfillment of all that he holds dear, is that moment when he has worked his heart out in a good cause and lies exhausted on the field of battle - victorious."
  • ...Vince Lombardi
competition article
Do you agree with Vincent Lombardi’s assertion that people are born with the desire to compete why or why not?

What areas do you see competition in the economy of the United States ?

How is competition beneficial to our economy/society?

How is it harmful to our economy/society?

Competition Article