Agenda Naked Economics Chapter 6 Class discussion…The Case for Capitalism Chapter 2 review

Lecture Articles

Quiz … open note Chapter 3

Lecture Homework

Read Ch. 3, Q. 1- 7, 12 Review Powerpoint for next class (online) Read “Current Reading Assignment” (online)

Test # 1 Period 1 - September 14 Period 2 - September 14 Period 4 – September 17

Naked Economics, Chapter 6

Five minute review

Writing Assignment to follow

Naked Economics, Chapter 6 Writing Assignment

1. What is a significant point of the chapter?

2. What is an example of that point?

3. What is an example of that significant point from our text book?

Bullet points are fineNo need to restate the question

Graphs are good

Class Discussion

The Case for Capitalism

http://www.manhattan-institute.org/html/ir_12.htm

Centrally Planned to Free MarketPage 43

Continuum of Mixed Economies

Centrally planned Free market

Source: 1999 Index of Economic Freedom, Bryan T. Johnson, Kim R. Holmes, and Melanie Kirkpatrick

Iran

North KoreaCuba

China

Russia Greece Peru United States

South Africa France United Kingdom

Botswana Canada Singapore

Hong Kong

Quotes …

The only freedom worth a damn is economic freedom.

M.L. Meinken, author

Hunger is the stuff of which dictators are made.

Franklin Delano Roosevelt

Econ Cartoon!

Articles Growth vs. Security Freedom vs. Equity Inequity

What’s the real argument going on here?

Articles Growth vs. Security Freedom vs. Equity Inequity

What’s the real argument going on here?

More government involvement or less government involvement

Quiz Chapters 1 & 2

Quiz Chapters 1 & 2 Cheat and you die

Quiz Chapters 1 & 2 Cheat and you die And you get a zero

THREE MINUTE BREAK

http://www.online-stopwatch.com/bomb-countdown/

Introduction to Chapter 3…The US Economy

Introduction to Chapter 3…The US Economy

What type of economic system is the US?

Introduction to Chapter 3…The US Economy

What type of economic system is the US?

Mixed Economy…some government and some individuals

Key termso Market Failureo Public Goodso Free Rider o Transfer Paymentso Externalities

Key termso Market Failure

o The free market fails to provide the good or service desired by society…the “market failed”

o Public Goodso Government provided good or service (i.e. parks, libraries, roads,

fire department)

o Free Ridero Uses the public good but did not pay for the public good

o Transfer Paymentso Payments by the Government

Key termso Market Failure

o The free market fails to provide the good or service desired by society

o Public Goodso Government provided good or service (i.e. parks, libraries, roads,

fire department)o Free Rider

o Uses the public good but did not pay for the public good

o Transfer Paymentso Payments by the Government

WHY?...Achieve Equity and Security

Externalities

Event that affects you

but you had no control over it

Externalities

Event that affects you

but you had no control over it

Can be Positive or Negative

ExternalitiesEvent that affects you but you had no control over it

Can be Positive or Negative

Examples Paseo Colorado Rain

A couple questions….1. The United States economy is a mixed economy

(a) based on the principle of a traditional economy, but allows some government intervention.

(b) based on the principles of a centrally planned economy, with limited government intervention.

(c) based on the principles of the free market, and allows no government intervention.(d) based on the principles of the free market, but allows some government

intervention.

2. Government intervention in a modern economy is useful because(a) the needs and wants of modern society are always met by the marketplace.(b) the marketplace has many incentives to create public goods such as parks and

libraries.(c) governments are able to provide some goods and services that the marketplace

has no incentive to produce.(d) the marketplace provides all of its own laws.

A couple questions….1. The United States economy is a mixed economy

(a) based on the principle of a traditional economy, but allows some government intervention.

(b) based on the principles of a centrally planned economy, with limited government intervention.

(c) based on the principles of the free market, and allows no government intervention.(d) based on the principles of the free market, but allows some government

intervention.

2. Government intervention in a modern economy is useful because(a) the needs and wants of modern society are always met by the marketplace.(b) the marketplace has many incentives to create public goods such as parks and

libraries.(c) governments are able to provide some goods and services that the marketplace

has no incentive to produce….public goods.(d) the marketplace provides all of its own laws.

HomeworkRead Ch. 3, Q. 1- 7, 12 Review Powerpoint for next class (online) Read “Current Reading Assignment” (online)

Test # 1 Period 1 - September 14 Period 2 - September 14 Period 4 – September 17

HANDOUTS

ADAM SMITH TIE