Understanding Economic Systems through K-W-L Chart Analysis

1. Warm – UpNov 9, 2010 If you had enough money to purchase anything in the world that you want, what would it be? Why? ( 5 mins)

2. Activator • K-W-Lchart graphic organizer…Students will complete ONLY theKand W columns on their K-W-L chart. Students will write down anything they already know about economics under theK column and anything they would like to know under the W column. Teacher will allow students an opportunity to discuss the information on their K-W-Lchart. ( 10 mins)

3. Standards/Elements • SS7E5 The student will analyze different economic systems a.Compare and contrast 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 market and pure command.  Today I will express how various economic systems operate by using my learning style to share my knowledge with my teacher and classmates.

4. Essential Question How do traditional, market, and command economies answer the questions of what to produce, how to produce and for whom to produce?

5. Work Period Students will view a power point presentation that explains how different economic systems operate. Students will record their information into their cloze-notes graphic organizer about each economic system: Traditional, Market and Command.  • #2) Students will complete unpacking the standards graphic organizer. Graded Assignment ( 30 mins)

6. Economic Systems

7. All Economic Systems seek to answer the three basic economic questions • 1) What to produce? • 2) How to produce? • 3) For whom to produce?

8. Traditional Economies • Basic economic questions answered by what has been done in the past • Traditions are maintained • Ritual, Habit, and Custom

9. Traditional economies • Individual roles and choices are defined by the customs of elders and ancestors • These economies are usually based in societies of hunter/gatherers • Sharing is a big part of these economies

10. Examples of Traditional economies • Australian aborigines

11. The Mbuti in Central Africa

12. The Inuit of Northern Canada

13. How do Traditional economies answer the three basic questions? • 1) What to produce? Whatever ritual, habit or custom dictates • 2) How to produce? However ritual, habit or custom dictate • 3) For whom to produce? For whomever ritual, habit or custom dictate

14. Advantages of Traditional economy • There is little to no uncertainty • Everyone knows what role to play • Life is generally stable, predictable, and continuous

15. Disadvantages of Traditional economies • Tend to discourage new ideas and new ways of doing things • Lack of progress lowers standard of living

16. Command Economies • Basic economic questions answered by the government (central authority)

17. Examples of Command economies • Only one command economies left – North Korea • All others have mixed in market economy with their command structure (China)

18. North Korea

19. How do Command economies answer the basic economic questions? • 1) What to produce? Whatever the government says to produce • 2) How to produce? However the government tells you to produce • 3) For whom to produce? For whomever the government tells you to produce (ideally the entire society)

20. Advantages of Command Economy • Because the government has total control over production and its factors, these economies can change rapidly. • Whatever is needed most will be produced. • There is no uncertainty (people are told when and how to work) • Free education, health care, and other public services

21. Disadvantages of Command economy • Economy designed to meet needs not wants • No incentive to work hard (people don’t often lose their jobs, so they do the bare minimum to get by) • Large bureaucracy means slow decision making, raises cost of production, lacks flexibility • No reward for initiative which slows progress

22. Market Economies • Basic economic questions answered by consumers • Dollars = Votes

23. Examples of Market economies • USA, Canada, UK, etc. etc.

24. Advantages of Market Economies • Adjusts to change based on consumer wants • High degree of individual freedom • Low levels of government interference • Because individuals (with money) make the decisions, everyone (with money) has a voice in the way the economy runs • Wide variety of available goods & services • Many choices = high degree of consumer satisfaction

25. Disadvantages of Market Economies • Poverty: only those with money can participate • Market does not provide for people’s basic needs. Governments must attempt to do this (think Katrina). • High degree of uncertainty people lose jobs, businesses fail • Greed based system puts profit before people

26. What is a Mixed Economy? • A mixed economy blends components of two or more of the following economic systems to varying degrees: traditional, market, and command

27. ClosingIn the Hot Seat Prior to the beginning of class, the teacher will prepare questions related to the topic of study and write them on sticky notes.  Four to five questions are usually enough. Sticky notes are placed underneath student desks/chairs so that they are hidden from view.  At the start of the class, inform students that several of them are sitting on "Hot Seats" and will be asked to answer questions related to the topic of study for the day.  Students who have questions on sticky notes will then take turns reading the question and attempting to provide an answer ( 10 mins)