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2/5 – Economic Systems. AIM :  To examine CEO pay as a factor payment . Factor Payment : The income people receive for supplying factors of production – land, labor, capital, or entrepreneurship. CEO Pay Debate. The class will be split into four teams. (2 per side)

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2 5 economic systems
2/5 – Economic Systems

  • AIM:  To examine CEO pay as a factor payment.

  • Factor Payment: The income people receive for supplying factors of production – land, labor, capital, or entrepreneurship.


Ceo pay debate
CEO Pay Debate

  • The class will be split into four teams. (2 per side)

  • Tonight, read through the resources on the web. Take notes for BOTH side.

  • Tomorrow your side will be determined by a coin toss. You will have 15 minutes to prepare once your side is determined.


2 6 ceo pay
2/6 – CEO Pay

  • AIM: Are American CEO’s overpaid?

  • Opener: What factors might go into determining somebody’s salary?


2 11 wealth of nations
2/11 – Wealth of Nations

  • AIM: What were Adam Smith’s contributions to economics?

  • Opener: Download the reading from the weekend (online at THHS website). Then, write:

    • Two interesting facts you learned.

    • One question you have about the reading.



Competition self interest
Competition & Self-Interest

  • What roles do competition and self-interest play in Adam Smith’s economic vision?


Scenarios
Scenarios:

  • Explain the following scenarios from the viewpoint of Adam Smith:

  • The rise of the phone companies BoostMobile and MetroPCS

  • The popularity of Apple computer products


Monopoly as the enemy
“Monopoly” as the Enemy

  • Explain the following quote from the reading:

  • “The great enemy to Adam Smith’s system is… monopoly in any form”.


Law of accumulation vs law of population
Law of Accumulation vs. Law of Population

  • How do these two “laws” balance each other out?


2 5 economic systems

http://www.slate.com/blogs/moneybox/2013/02/07/david_einhorn_sues_apple_over_its_cash_stockpile.htmlhttp://www.slate.com/blogs/moneybox/2013/02/07/david_einhorn_sues_apple_over_its_cash_stockpile.html


The role of government
The Role of Governmenthttp://www.slate.com/blogs/moneybox/2013/02/07/david_einhorn_sues_apple_over_its_cash_stockpile.html

What roles of government might be missing from Smith’s view? Explain.


2 13 command economies
2/13 http://www.slate.com/blogs/moneybox/2013/02/07/david_einhorn_sues_apple_over_its_cash_stockpile.html– Command Economies

  • AIM: What does life look like in a command economy?

  • Opener: Can you explain this political cartoon?


2 5 economic systems

  • Economic Systemhttp://www.slate.com/blogs/moneybox/2013/02/07/david_einhorn_sues_apple_over_its_cash_stockpile.html: The method used by a society to produce and distribute goods and services.

  • There are four different economic systems:

    • Traditional economy

      • Relies on habit, custom, or ritual

    • Market Economy (capitalism)

      • Decisions made by individuals

    • Command Economy (associated with communism/socialism)

      • Decisions made by central government

    • Mixed Economy

      • Combination of market and command economies


Introduction to command economies
Introduction to Command Economieshttp://www.slate.com/blogs/moneybox/2013/02/07/david_einhorn_sues_apple_over_its_cash_stockpile.html

  • SocialismvsCommunism – what’s the difference?


Introduction to command economies1
Introduction to Command Economieshttp://www.slate.com/blogs/moneybox/2013/02/07/david_einhorn_sues_apple_over_its_cash_stockpile.html

  • SocialismvsCommunism – what’s the difference?

    • Socialism is a social and political philosophy based on the belief that democratic means should be used to distribute wealth evenly throughout a society.


Introduction to command economies2
Introduction to Command Economieshttp://www.slate.com/blogs/moneybox/2013/02/07/david_einhorn_sues_apple_over_its_cash_stockpile.html

  • SocialismvsCommunism – what’s the difference?

    • Socialism is a social and political philosophy based on the belief that democratic means should be used to distribute wealth evenly throughout a society.

    • Communism is a political system that arose out of the philosophy of socialism. It is an authoritarian system where all economic and political power rest in the hands of a central government.


East germany as an example of a communist society
East Germany as an example of a communist societyhttp://www.slate.com/blogs/moneybox/2013/02/07/david_einhorn_sues_apple_over_its_cash_stockpile.html

  • East Germany arose out of the defeated Nazi Germany of World War 2.

  • In 1945, the Allied powers divided up Germany into four sections. The sections controlled by the USA, Great Britain, and France combined to form West Germany, a free-market democracy.

  • The section controlled by the USSR became East Germany, a communist state.

  • Looking at a divided society like East & West Germany is an interesting way to examine how competing philosophies of democracy and communism worked out.

  • In the end, it didn’t work out. On the 9th of November, 1989, protests forced the end of the East German government. East and West Germany were reunited in 1990 as a free-market democracy.


East germany as an example of a communist society1
East Germany as an example of a communist societyhttp://www.slate.com/blogs/moneybox/2013/02/07/david_einhorn_sues_apple_over_its_cash_stockpile.html

  • SED = SozialistischeEinheitsparteiDeutschlands (Socialist Unity Party of Germany)

  • GDR / DDR = German Democratic Republic / Deutsche DemokratischeRepublik(East Germany)


Group reading and presentations
Group Reading and Presentationshttp://www.slate.com/blogs/moneybox/2013/02/07/david_einhorn_sues_apple_over_its_cash_stockpile.html

  • Assignment:

    • Prepare a brief presentation to the class how life in East Germany reflects the ideals of a centrally planned economy.

    • Contrast the East German lifestyle with that of a free-market economy.

    • What are both the benefits and disadvantages of the East German lifestyle?


Group research and presentations
Group Research and Presentationshttp://www.slate.com/blogs/moneybox/2013/02/07/david_einhorn_sues_apple_over_its_cash_stockpile.html

  • “The dream of full employment” + “planned economy without a plan”

  • “Sold-out” + “State Owned Product Worlds”

  • “Home sweet home”

  • “Sibylle fashion dreams”


Chapter 2 homework review
Chapter 2 Homework Reviewhttp://www.slate.com/blogs/moneybox/2013/02/07/david_einhorn_sues_apple_over_its_cash_stockpile.html

  • Page 27

    • 2: Each system answers production and distribution questions differently

    • 6: Military and a decent quality of living for its citizens

    • 7:

      • Traditional values custom

      • Market values individual freedom and growth

      • Central values economic equity & security

      • Mixed values economic freedom and limits on gov’t


Chapter 2 homework review1
Chapter 2 Homework Reviewhttp://www.slate.com/blogs/moneybox/2013/02/07/david_einhorn_sues_apple_over_its_cash_stockpile.html

  • Page 32

    • 6: Combination of self-interest and competition would lead to an economy offering desirable products at reasonable prices

    • 8: Economic equity is difficult to achieve in a free market economy because not every person functions in the market with the same skills and abilities & therefore differences in compensation arise.


Chapter 2 homework review2
Chapter 2 Homework Reviewhttp://www.slate.com/blogs/moneybox/2013/02/07/david_einhorn_sues_apple_over_its_cash_stockpile.html

  • Page 38

    • 1: In both socialist and communist nations, the gov’t often owns major industries. But socialism is achieved peacefully through democracy. Communist gov’ts control both political and economic power; they are authoritarian.

    • 5: Centrally planned economies eliminate competition, giving businesses no incentive to produce goods of high quality. Also the bureaucracy is slow to respond to consumer wants/needs.


Chapter 2 homework review3
Chapter 2 Homework Reviewhttp://www.slate.com/blogs/moneybox/2013/02/07/david_einhorn_sues_apple_over_its_cash_stockpile.html

  • Page 44

    • 1: Laissez-faire is the doctrine that states that gov’t should not intervene in the marketplace

    • 4: Your answer should discuss individual vsgov’t role in the marketplace.