Chapter 2: Economic Systems

Turn right 1 mile

Warm Up

» What is a PPC?

» How can a PPC be used to help analyze decision making?

Agenda

» Discuss Marshmallow Mansions» Chapter 2 Intro Activity» Cover all of Chapter 2» Still have time at the end for extra credit activity

Discuss MM

» Make sure to turn in your handouts

Activity» Groups trying to win a “special” prize

» Win by scoring the most points» Groups will receive 3 sheets of paper & one pair of scissors

» Can make any combo of the following:» Paper footballs- 5 points each» Paper cards- 3 points each» Crumpled balls- 1 point each

» ALL PAPER MUST BE CUT

Follow up

» As a group, what did you do?

» What did you have to figure out?

You just had one

» Definition?» What’s it mean?» What to make?» How to make it?» Who gets it?

We all do it…are we all the same?

» Absolutely not!» Differ in 7 goals we favor» Efficiency» Freedom» Security & predictability» Equity» Growth & innovation

Biggest diff

» Not in the 3 key questions» Not in 7 goals preferred» Biggest occurs in who has the power

» 4 different options: market, command, mixed, & traditional

Traditional

» All you need to know

System based on TRADITION…don’t change

People or Government?

» Market Command

All people, no gov’t All gov’t, no people

Mixed

» Taught to share» Some people power, some gov’t

Markets rock

» Name 3 markets found in town

Anywhere things are bought & sold

What makes it work?

» Each person does their own thing

» What does that do when we SPECIALIZE?

» What else do we all do?» Why do you buy bananas?http://www.youtube.com/watch?v=GeoFcgq_PlY

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Who has more power?

» Wal-Mart is huge (2.1m employees & $400b + in revenue)

» How are you more powerful?» CONSUMER SOVEREIGNTY

» Market is a beautiful thing

Breather

» Make sure first two sections are finished

All about the gov’t

» Central gov’t has all the power

» Decide what? How? For whom?

versus

What was the focus?

» http://www.youtube.com/watch?v=VVGMAhFxH9A

» http://www.youtube.com/watch?v=HJoyOl7_QBg

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What problems arise?

» All guns; no butter» People die

» How is the workforce affected if everyone is guaranteed a job?

» Think about it from your perspective

NO INCENTIVE

» Why would you work hard?» What happens when you always have a job?

» Cuba 1.8% unemployment (14th)» $12,700 average income

» Canada 6.1% unemployment» $40,200

Government doesn’t rock

» System is inherently flawed

» We do as little as we need to to get by

» Preaching to the choir

Warm Up

» Explain the difference between command and market economies.

» Which would you want to live in?

Good & bad news

» Technically we have no market or command economies today

» All count as mixed» Part people, part gov’t

» Vary in amount of gov’t control» Chart in book» Why do even we need some gov’t?

Think about the recession

» Right now things are not going well

» Adam Smith knew his stuff» What would happen without gov’t?» We’d fall apart» What else do they do for us?» PROVIDE THINGS MARKET DOES NOT…HELP US WHEN WE FALL

SUMMARY

» We all have to live, function, and survive together (ECONOMIC SYSTEM)

» Vary in amounts of gov’t control

» MORE MARKET, MORE MONEY» NEXT CHAPTER WE EXPLORE OUR SYSTEM FURTHER

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