How does a traditional economy answer the three economic questions?

Test Corrections Format1. Question: Scarcity is best defined as• Answer: The fact that people have unlimited

wants and limited resources.• Explanation: Scarcity is the basic human

condition. No one can satisfy all of their wants/needs.

Today’s Agenda• Test Corrections• Complete Prequiz

– Economic Systems and the Free Market• Work on Terms

Economic System – method used by society to allocate/distribute the scarce resources in order to bring goods and services to the people

Economic System

Traditional Command Market Mixed

Tribal living thatrelies on habit, custom, or ritual to decide how to provide for society

Government controlswhat is produced and how to provide for citizens.

Buyers and sellers determine

what is in demand and

what to supply.

Buyers and sellers operate

while government regulates the

Market

Economic Systems

1. What to Produce?

• What goods and services should be produced

2. How to Produce it?

• What methods should be used?

3. Who to Produce it For?

• Everyone equally?• People with money?

3 Economic Questions

Bead Game Simulation

• Round 1: "That's The Way We've Always Done It Ville“

• Round 2: "We Do What We're Told Ville“

• Round 3: "Make As Much As We Want Ville"

Economic Freedom - freedom to buy or sell what we want, make choices with little interference by the government• Individual – where to work, study, consume• Business – what, where and how to produce

Economic Freedom

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

Economic Efficiency

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

Economic Security

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

Economic Predictability

Economic Equity – Fair work for fair pay; being paid according to your skill level• Lebron James is higher paid than a teacher• A teacher is higher paid than a cashier at Wal-mart

Economic Equity

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

Economic Growth

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

Economic Innovation

Additional Goals – future goals for a society • Environmental protection, full employment, universal medical care, etc.

Additional Goals

Amazon and Economic GoalsEconomic Goals Examples in the Video

Economic Freedom

Economic Efficiency

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.

Economic Goals and Societal Values Poster Project – pgs. 26-27Poster Requirements:1. Title - Economic Goals2. Summary Statement – “The Economic Goals

provide a way for us to compare each societies ideals and objectives for their people.”

3. Pictures of each goal represent each of the economic and social goals.

• 1 if working alone• 2 if working with a partner

4. Label, describe and summarize each picture

1. Economic Freedom2. Economic Efficiency3. Economic Security 4. Economic Predictability5. Economic Equity6. Economic Growth7. Economic Innovation8. Additional Goals

Economic Goals and Societal ValuesSummary Statement:

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

their attempts to provide fortheir people.

Economic EfficiencyDefinition: picture represents an efficient use of resources through

assembly line production

Economic Security

Economic Growth

Economic Equity

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

Economic Freedom Additional Goals

Economic Innovation

Economic Predictability

Poster Requirements:1. Title - Economic Goals and Societal Values2. Summary Statement – Purpose of economic and Societal Values3. At least 8 pictures to represent each of the Economic Goals and Social Values4. Label, definition and picture description for each of the 8 Economic Goals and Societal Values

Are we running out of resources?

http://www.youtube.com/watch?v=AcWkN4ngR2Y

Review Economic GoalsStatements Economic Goal1. Last week I willingly enrolled in college

courses at Coastal. I am so happy that I make my decisions about my future.

2. My uncle lost his job, but thankfully he is able to receive unemployment checks.

3. Wal-Mart recently upgraded all of their registers to touch screen monitors.

4. General Motors replaced all of their human workers with robots in order to increase productivity.

5. As a result of the internet and technology, our economy has experienced significant expansion over the past 30 years.

6. I can always expect Publix to have the food I like!

7. Hopefully in the future we will have full employment.

8. With every degree/skill I earn, I improve my ability to make money.

1. Economic Freedom

2. Economic Security

3. Economic Innovation (Efficiency)

4. Economic Efficiency (Innovation)

5. Economic Growth (Innovation)

6. Economic Predictability

7. Additional Goals

8. Economic Equity (Growth)

Activator Imagine that you are walking into Walmart. List 3

items that you could purchase and the departments that you would find them in.

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 The government has a very limited role

The Free Market

Voluntary Exchange Candy Trade

Candy Rating before trade Rating after trade

Voluntary Exchange – is the act of buyers and sellers willingly and freely engaging in market transaction where both parties benefit.

Examples: When I buy gasoline, I get energy for my car, the firm gets my

money

Voluntary Exchange

Consumer Sovereignty - in a free market, consumers determine the goods that are produced; this makes them "sovereign“ or the ruler over what is produced 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, they signal to producers what to make and how much to produce.

Role of the Consumer

Specialization Specialization – the separation of tasks; people

focus on a specific purpose/task Division of Labor – Workers perform fewer

tasks in order to operate more efficiently

Specialization Examples

Social Studies

Math

Science

English

Specialization Examples

Rancher

Publix Worker

Slaughter House Meat Cutter

Final Good (Output)

Consumer Good

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

Specialization and Efficiency

Specialization and Productivity

1 Farmer 10 hours to till the land 1 Farmer 1 hour to till the land

Productivity Creates Wealth

3rd World Countries Developed Countries

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?

Productivity

Jack 25/5 = 5 Baskets per hourWalter 36/6 = 6 Baskets per hourRudy 40/10 = 4 Baskets per hourSam 22/4 = 5.5 Baskets per hourJim 50/10 = 5 Baskets per hour

Walter has the greatest productivity

ProductivityInputs Outputs

Free Market Video

Markets Consist of Buyers and Sellers

Household – Person or group of people living in a residence Consumers - use the final goods and services (outputs)

to satisfy wants and needs Firm – business organization that uses resources to

produce goods/services, which it then sells Suppliers – transform “inputs” (F.O.P.) into “outputs”

(products)

Households and Firms

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)

Product Markets

Factor Markets – the markets where productive resources (F.O.P are bought and sold

Inputs: Firms are the buyers, households are the sellers Labor - Firms (businesses) hire workers and pay them

salaries Land - Purchas/rent land Capital (financial) - Use money from households

(savings, investment, etc) to purchase capital goods

Factor Markets

Circular Flow Model - shows the flow of money and inputs/outputs from and to firms and households.

1. Households 2. Firms

4. Factor Market

3. Product Market

5. Money (Consumer Spending)

7. Consumer Goods and Services

6. Stuff - Goods and Services (outputs)

8 Business Income (Revenue)

10. Land, Labor, Capital, Entrepreneurs 11. Factors of Production

(Inputs)

Payments for land, labor, capital

12 Income, Wages, Salaries

13.

14.

Flow of MoneyFlow of Inputs/Outputs

Daily Assignment - Circular Flow Model of Economic Activity

Household1. ________________________

FirmFirm 1. _____________________________

Firm 2. _____________________________

Factor Market

Product Market

Consumer Spending

1. _________________________

Goods Purchased

1. ______________________________

2. _______________________________

Goods Offered1. ___________________________

2. ___________________________

Business Income

1. _________________________

Factor of Production Offered

1. ___________________________

Input for Production

1. ___________________________

Payments for F.O.P

1. _________________

Weekly Income

1. __________________

Taxe

sTaxes

Taxes

Taxes

Stossel - Rinkinomics http://www.youtube.com/watch?v=EVHw_

U1v3HI

A. _________________________________________________________________________________B. _________________________________________________________________________________C. _________________________________________________________________________________D. _________________________________________________________________________________E. _________________________________________________________________________________F. _________________________________________________________________________________G. _________________________________________________________________________________H. _________________________________________________________________________________

Consumer SpendingBusiness Revenue/IncomeMoney for the Factors of ProductionWages, Salary, IncomeFinal Goods and ServicesOutputs Consumer GoodsLand, Labor, Financial CapitalInputs for Production

2. In the Factor (Resource) Market:a. What do firms bring to the market?

_______________________________________________b. What do most households bring to the market?

____________________________________________3. In the Product Market:

a. What do firms bring to the market? _______________________________________________

b. What do most households bring to the market? ____________________________________________

4. Based on the above circular flow, what letter sequences represent the voluntary exchange of money for goods and services? ________ to _________ and _________ to __________

5. Based on the above circular flow, what letter sequences represent the voluntary exchange of labor and wages? ________ to _________ and _________ to __________

6. What arrows represent the flow of money? ____________________________________7. What arrows represent the flow of inputs and outputs? _______________________________

Money for the Factors of Production (inputs)

Labor

Consumer Products (Outputs)

Money for Consumer Products

A B E F

C D G HOuter

Inner

Circular Flow Model of Economic Activity

Household1. ________________________2. ________________________

FirmFirm 1. _____________________________

Firm 2. _____________________________

Factor Market

Product Market

Consumer Spending

1. _________________________

Goods Purchased

1. ______________________________

Goods Offered1. ___________________________

2. ___________________________

3.___________________________

Business Income

1. _________________________

Factor of Production Offered

1. ___________________________

Input for Production

1. _________________________

2. _________________________

3. ________________________

Payments for F.O.P

1. ________________2. ________________3. ________________

Weekly Income

1. __________________

ElisaMarcella

CilantrosBooks a Million

TacosBurritosFajitas

Fajitas

9.49 9.49

Labor/SalespersonStockersCoffee SellersCashiers

200 3000- Lease2200 – Electric400 - Water

Today’s Assignments 1. Prequiz – Free Enterprise, pgs. 51-552. Prequiz – Providing Public Goods, pgs. 62-663. Flow Chart- American Free Enterprise (13), pgs. 52 – 534. Adam Smith Article (14), pg. 33

Name________________________________________________________________________Flow Chart – American Free Enterprise, pgs. 52-53

Economic Freedom

Competition Private Property Rights

Self-Interest Voluntary Exchange

Description • Individuals’

right to choose their occupation and what to buy.

• Firms’ right to hire or produce.

Description Description Description Description

Profit Motive

Description

American Free Enterprise

Examples1. 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.

Examples

1.

2.

Examples

1.

2.

Examples

1.

2.

Examples

1.

2.

Examples

1.

2.

Description

Examples

1.

2.

Description: Buy or sell freely Little government interference.

Examples: 1. Jobs, products

Economic Freedom

Description: Competition – rivalry among companies for the consumer Examples:

Mcdonalds vs. Burger King Walmart vs. Target

Competition

Description: Individuals and firms own the property Examples:

Cars, homes, factories, machines, etc.

Private Property Rights

Self - Interest Description

Individual’s self-interests benefits the entire well-being of society. Examples:

Individual's pursue goals to improve livelihood Firms pursue profits

Description: Voluntary Exchange – buyers and sellers willingly and freely engaging in market transaction

where both parties benefit. Examples:

When I buy gasoline, I get energy for my car, the firm gets my money

Voluntary Exchange

Description: The force that encourages people and organizations to improve their material

well-being Examples

Money motivates individuals to pursue education and firms to expand and produce

Profit Motive

1. What was Adam Smith’s ethnic and professional background?

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

3. What did Smith identify in the book?

4. What did he assert about specialization and division of labor?

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

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

7. What is meant by his metaphor of the Invisible Hand?

8. How do both consumers and businesses benefit from this philosophy?

Chapter 2 Section 2 – Daily Assignment Economic Profile Adam Smith pgs. 33

• Scottish, Philosopher, Professor

• Wealth of Nations, 1776

• Land, labor and capital as the factors of production that generate wealth

• Specialization increases productivity

• Government should leave individuals as free as possible to pursue their interests

• Let them do as they please, Individuals try to pursue their own self-interest will benefit all of society

• Invisible force that controls the market

• Consumers buy what they want, producers supply for profit

Buyers and Sellers

Buyers, Sellers and the Government

Economic Freedom2008 2014

The Market for Guns

The Market for Guns

Airline Market

Airline Market

Television and Radio

2.5 Million in fines from the FCC

Soda Ban

• http://www.youtube.com/watch?v=24sJe9H29NE

Government acts an informer, protector, provider, and regulator Government has the responsibility to protect property rights,

inform the public and oversee business activities

Role of the Government in a Market Economy

Role of the Government in a Market Economy Government acts an informer, protector, provider, and regulator Government has the responsibility to protect property rights,

inform the public and oversee business activities

Role of the Government as Informer: Make sure that producers provide consumers with full disclosure

Consumers use govt. info. to protect themselves from dangerous products and fraudulent claims.

Role of the Government as Informer

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

Role of Government as Protector

Government regulation can have negative effects on businesses and consumers Negative effects:

1. New rules can increase the cost of business2. Government oversight can cause reduced incentives to produce3. Increase of governmental oversight (creating new programs) can lead to higher taxes

Government as a Regulator

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

Government as a Provider

Government Regulation http://www.youtube.com/watch?v=nBiJB8

YuDBQ&feature=endscreen

Unintended Consequences http://www.youtube.com/watch?v=iuZOAi

ga_9A

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, Police, Firefighters

Public Goods and Services

When the government takes from one group and reallocates to another group

Welfare, Social Security, Unemployment, Food Stamps, etc.

Redistribution of Income

The market, on its own, does not distribute resources efficiently Externalities

Market Failure

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.

Negative Externalities

Negative Externalities

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

Positive Externalities

Write an example of a negative and positive externality. What kind of government regulation could be used to

eliminate your negative externality?

Application Question

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

Command Economies

Travel Restrictions• “The restriction includes tourist travel to Cuba

from or through a third country such as Mexico or Canada … Travelers who fail to comply with Department of the Treasury regulations could face civil penalties and criminal prosecution upon return to the United States.”

Jay Z Beyonce

• https://www.youtube.com/watch?v=B5sUrX_XyGc

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

Socialism and Communism

North Korea Video

Today’s Assignments 1. Prequiz – Command Economy, pgs. 34-382. Terms (found on the board)

Command Economies Prequiz

Tradition Command Market

What to Produce?

How to Produce it?

For Whom to Produce?

Whatever is necessary for the tribe to survive.

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

The tribe

Whatever the government tells them to produce.

Based on the government.

Whoever the government tells them to produce it for.

Whatever is in demand by the consumers.

The most efficient method possible; technological innovations.

Consumers that are willing to purchase.

Daily Assignment – Comparing Economic SystemsTradition Command Market

1.

2.

3.

1.

2.

3.

4.

1.2. 3.4. 5. 6.7.8.9.

1.

2.

1.

2.

1.

2.

3.

4. 5.

6.

1.

2.

1.

2.

3.

4.

5.

1.

2.

3.

4.

Adv

anta

ges

Dis

adva

ntag

esE

xam

ples

Central African Mbuti

Australian Aborigines

Inuits of Canada

Everyone knows their role in society/economy

Economic questions are answered based on tradition

Discourages new ideas

Lack of progress, lower standard of living

North Korea

Cuba

ChinaFormer Soviet Union

Change economic direction in a short time Health and public services are available at little or no cost (regardless of income)

Not designed to meet wants of consumersDoes not give incentive to work hardLarge decision-making bureaucracyLack of economic flexibility Lack of economic freedom, profit motive

United StatesCanadaJapanSouth KoreaSingaporeGermanyFranceGreat BritainWestern Europe

Adjust to change over time

Individual economic freedom

Limited government interference

Decision-making is decentralizedVariety of goods and services

High degree of consumer satisfaction

Does not provide basic needs for everyoneLack of public goods by private marketsHigh degree of uncertainty, job loss, competitionMarket failures (monopoly)

1. What traditions are mentioned regarding American society?

2. List some additional traditions that you have in your family.

3. How did the Inuit exemplify a traditional economic system?

4. How did the State Planning Commission determine the direction of the Soviet economy?

5. What shortcut did Soviet workers take in order to fill their quotas; what did it lead to?

6. How did the State Planning Commission respond to a shortage of male workers?

7. Describe what a “dollar vote” indicates.

8. Describe how the market adjusted from the 1970s gas shortage, to the 1980s.

9. What examples are provided of the various goods and services provided in a market economy?

10.How do both the majority and minority end up satisfied in a market economy?

11.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

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

Modern Economies

North Korea

Cuba

Iran

China

Mexico France

South Africa

Poland Japan

United Kingdom Hong Kong

Canada Singapore

United States

Centrally Planned Free Market

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

Laissez Faire in a Modern Economy

Taxes from both households and businesses Income tax, state income tax, social security,

Medicare/Medicaid, unemployment insurance, etc.

Government Money

Government purchases land, labor, and capital from households

United States gov’t pays 2.8 million employees $9.7 billion for labor

Government in the Factor Market

Government purchases goods and services from firms (businesses) Office supplies, telephones, computers, etc.

Government in the Product Market

Economic GoalsFreedom Efficiency Security Predictability

Equity Growth Innovation Additional Goals

The Free MarketConsumer

SovereigntyCompetition Property Rights Self-Interest

Voluntary Exchange Profit Motive Specialization Division of Labor

Government in a Free MarketPublic Sector Private Sector Public

Goods/ServicesRegulate

Inform Protect Provide Market Failures

Economic Goals Market Command Tradition

Economic Freedom

Economic Efficiency

Economic Security

Economic Predictability

Economic Equity

Economic Growth

Economic Innovation

Yes – productivity = money

No – Lack of profit motive creates a disincentive

No – inefficient use of resources by modern standards

Little – laissez-faire, limited government

Yes – government provides jobs

Yes – assigned roles

Yes – profit motive and open markets and free trade

No – government mismanagement can lead to shortages

No – Hunter-gatherer problem

Yes – paid based on skills

No – collectivism (no individualism)

Yes/no – everyone shares

Yes – competition and profit motive

Slow - lack of profit motive

No – little to no innovation

Yes – innovation and technology leads to profit

Limited – lack of innovation because of a lack of incentive

No – lack of modern innovations

Yes - freedom to buy and sell

No – controlled by the government

No – based on custom, heritage and tradition

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

Essential Question #1

1. Tradition – based on habit, ritual, custom2. Market - based on buyers and sellers3. Command – based on central planners/government 4. Mixed – based on a market economy, with government

regulation

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

Essential Question # 2

• Explain how each society provide goods and services to satisfy wants and needs for their people, in light of scarce resources.

How does the Circular Flow model show a market economy?

Essential Question #3

• 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).

Test Corrections Format1. Question: Scarcity is best defined as• Answer: The fact that people have unlimited

wants and limited resources.• Explanation: Scarcity is the basic human

condition. No one can satisfy all of their wants/needs.

1. Traditional Economy2. Command Economy3. Market Economy4. Market5. Free Market6. Specialization7. Division of Labor8. Household9. Consumer10.Firm11. Supplier12.Product Market13.Factor Market14.Centrally Planned

Economy

15. Socialism16. Communism17. Authoritarian18. Laissez-Faire

Chapter 2 – VIS Terms

Junk!!!

Daily Assignment Group PresentationsUsing the Chart Below, identify each groups Economic Goals andSocietal Values and the picture they used to represent each goal.

Group Number Economic Goal Picture

Include On Your Test

1. Name2. Date (1-30)3. Class Period4. Chapter 2 Test5. ID: A, B, C

Junk!!!

Due Friday

1. Lorax Worksheet2. Comparing Economic Systems -

Reflection Questions and Chart3. Bead Game Simulation4. Government Regulation Online Assign.5. Video Questions - North Korea/Cuba6. CW Puzzle7. Study Guide Chapter 2 8. Circular Flow Practice9. Daily Tens 10. Essential Questions 11. Terms Ch. 212. Test Standard Sheet (include original test

answers + corrections)13. Notes14. Circular Flow Challenge

Junk!!!

Study Guide Chapter 21. Economic System2. What to produce, How to produce them,

Who to produce them for3. Economic: efficiency, freedom, security,

predictability, equity, growth, innovation, additional goals

4. Tradition, custom, ritual, habit5. Central planners dictate the what, how, for

whom6. Buying and selling of households and firms7. Market 8. Market economy9. Capitalism10. Households and Firms11. Input is something used to produce and

output, which is a final good or service12. Productivity13. Rudy14. Product15. Factor

Study Guide Chapter 216. Adam Smith, Wealth of Nations17. Be limited in its role in the economy,

“Let them do as they please”.18. Invisible Hand19. Karl Marx, Communist Manifesto20. That it would fail because it put too

much money in the hands of the rich and not in the hands of the poor

21. Communism, Socialism22. Authoritarian23. Economic Freedom24. Property Rights25. Profit Motive26. Voluntary Exchange27. Competition28. Consumer Sovereignty

Study Guide Chapter 3

29. Act as informer, protector, regulator and provider.

30. Public 31. Private 32. Free Rider33. Externality34. Education35. Pollution

1. Give an example of a positive and negative incentive.

2. Explain why the United States is not a true “pure market/free enterprise” system.

Extra Credit

1. Which type of economic system do you think is the best? Explain why.

2. Write the economic goal that you think is the most important. Explain why.

Extra Credit

Economic Goals and Societal Values - pgs. 23-27Economic Goal and Societal Values

Summary Example

1. Economic Efficiency

2. Economic Freedom

3. Economic Security and Predictability

4. Economic Equity

5. Economic Growth and Innovation

6. Additional Goals

Making the most of scarce resources

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

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 MoneyPredictability – gas at gas pumps, food at store

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

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

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

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

Future goal for society. Environmental protection, full employment, universal medical care.

Circular Flow Model of Economic Activity

Households Firms

Factor Market

Product Market

Consumer Spending/Investing

Goods and Services Purchased: Caramel Frappuccino

Goods and Services Sold

Business Income/Revenue

Land, Labor, Capital, Entrepreneurs Inputs for

Production (F.O.P.)

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

Income to Households/Individuals

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

Essential Question #1

1. Tradition – based on habit, ritual, custom2. Market - based on buyers and sellers3. Command – based on central planners/government 4. Mixed – based on a market economy, with government

regulation

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

Essential Question # 2

• Explain how each society provide goods and services to satisfy wants and needs for their people, in light of scarce resources.

How does the Circular Flow model show a market economy?

Essential Question #3

• 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).

Today’s Assignments• Economic Systems - Open-Notes Quiz (Ch. 2)• American Free Enterprise Open-Notes Quiz

(Ch. 3)

"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.

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

Vince Lombardi “What it Takes To Be Number 1”

1. Do you agree with Vincent Lombardi’s assertion that people are born with the desire to compete why or why not?

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

3. How is competition beneficial to our economy/society?

4. How is it harmful to our economy/society?

Competition Article

Review

Traditional Command Market Mixed

Tribal Living Government Controls the Economy

Buyers and Sellers Control the Economy

Buyers and Sellers operate

while Government

Regulates the Market

Economic Systems

What to Produce? How to Produce it? Who to Produce it For?

3 Economic Questions

The Circular Flow Model

SSEF3 The student will explain how specialization and voluntary exchange between buyers and sellers increase the satisfaction of both parties.

a. Give examples of how individuals and businesses specialize. b. Explain that both parties gain as a result of voluntary, non-fraudulent exchange.

SSEF4 The student will compare and contrast different economic systems and explain how they answer the three basic economic questions of what to produce, how to produce, and for whom to produce.

a. Compare command, market, and mixed economic systems with regard to private ownership, profit motive, consumer sovereignty, competition, and government regulation.

b. Evaluate how well each type of system answers the three economic questions and meets the broad social and economic goals of freedom, security, equity, growth, efficiency, and stability.

SSEF6 The student will explain how productivity, economic growth, and future standards of living are influenced by investment in factories, machinery, new technology, and the health, education, and training of people.

a. Define productivity as the relationship of inputs to outputs.

SSEMI1 The student will describe how households, businesses, and governments are interdependent and interact through flows of goods, services, and money.

a. Illustrate by means of a circular flow diagram, the Product market; the Resource (factor) market; the real flow of goods and services between and among businesses, households, and government; and the flow of money.

Include on Test1. Name2. Date (2-1)3. Class Period4. ID: A, B or C5. Test Economics Systems,

Goals and the Circular Flow (Ch. 2 +3)

Due Today1. Bead Game Simulation2. Free Market Video3. Cuba/North Korea Video4. Economic Systems Worksheet5. Circular Flow Practice6. Study Guide7. Terms8. Test Corrections9. Daily Tens (9)10. Essential Questions (3)11. Notes Packet

Stupid Laws1. A Florida law requires vending-machine labels to

urge the public to file a report if the label is not there.

2. The Federal Railroad Administration insists that all trains must be painted with an “F” at the front, so you can tell which end is which.

3. Bureaucratic busybodies in Bethesda, Maryland, have shut down children's lemonade stands because the enterprising young entrepreneurs did not have trading licenses.

4. In Georgia, it is illegal to use profanity in front of a dead body which lies in a funeral home or in a coroners office.

5. No one may carry an ice cream cone in their back pocket if it is Sunday.

6. Against the law to tie a giraffe to a telephone pole or street lamp.

7. One man may not be on another man’s back.8. No person may be buried under a sidewalk of a

cemetery.