What is economics?

1. What is economics? The study of how people manage their resources.

2. Person or people that make a good or provide a service (Sellers) Person or people that use or purchase a good or a service (Buyers) Items that can be touched (Food, TV, Car, iPod, T-Shirt) Things that can be done for you (Dental Checkup, Haircut, Babysitting, Lawn Mowing) R18

4. R18 & R19 Introduction to Economic Systems

5. Today’s Standard SS6E5 The student will analyze different economic systems. a. Compare 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 and market and pure command.

6. Intro to our……. “Essential Question(s)” How do the three types of economic systems (traditional, command, and market economies) answer the questions of what, how, and for whom to produce? How do most countries strike a balance between having a pure market and pure command economy?

7. Ask yourselves these questions while viewing:“How Economic Activities Define a Culture” What economic activities have members of a culture developed to meet their needs & wants? How have the features of the natural environment influenced the economic activities developed by members of a culture? What technology have culture members developed to help them carry on their economic activities?

8. Types of Economy Traditional-customs & habits of a society will determine what will be produced & how it will be distributed & consumed (Usually includes bartering, rather than money). Traditional economies are becoming more rare. Command-Government will determine what will be produced & how it will be distributed & consumed. Government will set prices and set regulations (rules) that industries must follow. Market- Individuals, private companies, & consumers will determine what will be produced & how it will be distributed & consumed. Individuals and companies are allowed to produce freely without government interference.

9. What people need to survive (food, shelter, clothing) – Mostly needs People make their own products or barter w/ people Farming Hunting Gathering Traditional What is a “MIXED” Economy? R19

10. Types of Economy Traditional-customs & habits of a society will determine what will be produced & how it will be distributed & consumed (Usually includes bartering, rather than money). Traditional economies are becoming more rare. Command-Government will determine what will be produced & how it will be distributed & consumed. Government will set prices and set regulations (rules) that industries must follow. Market- Individuals, private companies, & consumers will determine what will be produced & how it will be distributed & consumed. Individuals and companies are allowed to produce freely without government interference.

11. What people need to survive (food, shelter, clothing) – Mostly needs People make their own products or barter w/ people Farming Hunting Gathering Traditional Command Whatever the government decides However the government decides However the government decides *Can set limits What is a “MIXED” Economy? R19

12. Types of Economy Traditional-customs & habits of a society will determine what will be produced & how it will be distributed & consumed (Usually includes bartering, rather than money). Traditional economies are becoming more rare. Command-Government will determine what will be produced & how it will be distributed & consumed. Government will set prices and set regulations (rules) that industries must follow. Market- Individuals, private companies, & consumers will determine what will be produced & how it will be distributed & consumed. Individuals and companies are allowed to produce freely without government interference.

13. What people need to survive (food, shelter, clothing) – Mostly needs People make their own products or barter w/ people Farming Hunting Gathering Traditional Command Whatever the government decides However the government decides However the government decides *Can set limits Supply & Demand Producers decide, based on what customers want Whatever people are willing to buy & sell Determined by how much a person wants to or is able to pay Market What is a “MIXED” Economy? R19

15. ECONOMY TYPES IN EUROPE Pure Market Russia 50.5 Germany 71.8 United Kingdom 74.5 USA is 77.8 100 0 Mixed Economy Pure Command The numbering system is based on The Heritage Foundation’s Economic Freedom Index 2011 The Heritage Foundation is a conservative organization that has partnered with the Wall Street Journal for over a decade to evaluate each country based on a set of 10 criteria to determine economic freedom.

16. What people need to survive (food, shelter, clothing) – Mostly needs People make their own products or barter w/ people Farming Hunting Gathering Traditional Command Whatever the government decides However the government decides However the government decides *Can set limits Supply & Demand Producers decide, based on what customers want Whatever people are willing to buy & sell Determine by how much a person wants to or is able to pay Market What is a “MIXED” Economy? A “mixed” economy might use elements of both market & command economy. The United States has a mixed economy b/c the govt. doesn’t decide what & how goods are produced, but it does regulate certain items, like illegal drugs. R19

17. Return to our……. “Essential Question(s)” How do the three types of economic systems (traditional, command, and market economies) answer the questions of what, how, and for whom to produce? How do most countries strike a balance between having a pure market and pure command economy?