1. Teacher Page
Overall Objective: Students will understand the processes that influence political divisions, relationships and policies.
Topic A – What is Economics?
Topic B – Types of Economics
Activity 17:1 – Classify Economies
Activity 17:2 – Economic Systems Quiz
Activity 17:3 – M&M Economics
Activity 17:4 – Shoe Factory Economics
Activity 17:5 – Traditional vs. Industrial Economies
Activity 17:6 – Two Cows Economics
BORDERS AND POWER PRESENTATION
This presentation is shorter than some others by design. This section will take a lot more time on the teachers part explaining and using examples. Students need to see a lot of practial application of these terms, use their real life as examples to help them understand wherever possible.

2. Jarrett Book: Chapter 17 (276 – 291)
ECONOMIC
SYSTEMS
Jarrett Book: Chapter 17 (276 – 291)

3. Essential Questions
How do different societies around the world meet their economic need?
What are the advantages and disadvantages of each economic system?

4. Important Ideas
Economics is a study of how people meet their basic needs.
All societies must answer three questions:
What should be produced?
How should it be produced?
Who gets what is produced?
The answers to these questions determine its type of economic system.
Specific countries can be classified by the type of economy they have.
This are the main topics that are going to be covered.

5. What is economics? Lets go with this definition:
“Economics is the study of how individuals, businesses, and nations make things, buy things, spend money, and save money.”
Can you think of one word or maybe a phrase that simplifies this definition? If not, can you at least make it easier to understand? Give it a try!
Teacher Notes / Talking Points:
Students are likely to think that economics relates to money. That is ok, but make sure they understand the better word is exchange. They understand credit cards, etc., so there is more to economics than paper money. Trade, investment, savings, etc. - these are things they might not come up with right away.
One word – maybe exchange or trade, this really depends upon the student. This is just a summarization exercise. It could be done as a think – pair – share if you have the time. 5

6. We will always want the next thing!
The Problem of Scarcity
3 Years ago
I want a cell phone
Economics involves a lot of math, but it also depends a lot on human behavior. It is hard to predict what people will do with their money.
Scarcity is an economic problem. When something is scarce, we do not have enough of it.
Since people always want new and different things, it will be impossible for a society to make enough to always fill every need. Therefore, scarcity will always be an economic concern.
1 Year ago
I want an Iphone 4
This Year
Teacher Notes / Talking Points:
Scarcity is a pretty difficult concept, but students understand the idea that they will always want the next thing. People have unlimited wants, but society cannot make everything. Price is impacted by demand and in the case of scarcity, production speed or supply.
Thought Question – Ask students, “why was everyone that lined up to buy they 4G iphone not able to get one?” Scarcity impacts the economy, and always will.
I want an Ipad
We will always want the next thing! 6

7. Things that people do for others.
Lets make sure you know a few key terms before we go any further:
Goods
Services
Things people make. This could be a factory or in some sort of cottage industry
Things that people do for others.
Teacher Notes / Talking Points:
These terms are pretty basic, but they need to understand there is a difference.
The thought question at the bottom sort of brings back the idea that scarcity cannot be eliminated. Even Billionaires always want to buy new things.
Lets say you had ten billion dollars? Do you think you could end the problem of scarcity in the world? Why or why not?

8. What should be produced? How should it be produced?
Economics boils down to three basic questions:
What should be produced?
How should it be produced?
Who should get it?
The answers to these questions determines the economic system
Teacher Notes / Talking Points:
These three questions are typical for basic economic understanding, but not necessarily essential. It is essential that students can classify a countries economy, so using some sort of question set to do so is reasonable.
Students definitely need to know these four types of economies and the difference between them. However, realistically, they can only be expected to get the most basic ideas. Keep it simple.
Traditional Economy
Free Enterprise
Communist System
Socialist System

9. Custom and Tradition determine what will be produced.
People are free to take part in any legal business, buy or sell any legal product.
Custom and Tradition determine what will be produced.
Traditional Economy
The production of goods is based on custom and time honored methods; new ideas are often discouraged.
Often there is no private property; things are often owned by a family or village in common.
Teacher Notes / Talking Points:
It is important for you to try to help students to get all this information into a concise idea. Something like family based economy or some other idea that helps them summarize all of these ideas together. Hopefully, they can come up with that themselves, but you may need to help them simplify the information.
This economy is based largely on a lack of change, and it is interesting that as the world changes, these types of economies get more an more rare.

10. Subsistence Agriculture
So how does this look?
Subsistence Agriculture
Subsistence Farming in Sub-Saharan Africa
Subsistence Fishing in Sri Lanka (Near India)
Teacher Notes / Talking Points:
Students have heard this term before, but perhaps not seen it in action. The idea of growing crops only to eat rather than to sell is not too complicated, but student may not be able to relate to the idea that living without change.
Slash and Burn agriculture is connected in many was to subsistence farming. There is a lesson about this on the curriculum system.
Amcaja, Creative Commons July 2005.
The people in traditional economies usually only grow enough food to feed their family or village. Any animals they keep are used in the same way, gathering milk and eggs as a source of food. Many people use subsistence fishing as a means of support as well.

11. Cottage Industry So how does this look?
Teacher Notes / Talking Points:
Though this idea seems pretty simple, questions about this that have been issued on assessment have proven to get very low results. It appears that students do not understand this idea as easily as it might seem. It might be a good idea to spend a little time on this just to make sure they have the idea down in their mind.
Try to help students make the connection between subsistence farming and cottage industries. Growing only what you eat is fine, but buying seeds is necessary.
You may take some time to help students understand that cottage industry can happen anywhere. They might have a family member that sells things out of their home, makes jewelry, etc.
In traditional economies, people often create handmade products such as clothes, furniture or other products that can be sold or traded to help sustain their families or village. During times of the year where crops are not plentiful, this can help a family survive.

12. Berber Tribe in Algeria Bush People of the Kalahari Desert
Today, there are very few traditional economies left in the world. However, there are individual families or small groups, even in the United States, that practice that way of life.
Berber Tribe in Algeria
Bush People of the Kalahari Desert
Teacher Notes / Talking Points:
Berber Tribesmen are centered in Algeria, but are spread all over North Africa. This might be a good time to ask about why these people still maintain a nomadic or tradition economy? – The Sahara is the key.
The kalahari Desert is in South Africa.
The Hadza people of Tanzania still practice a hunting / gathering lifestyle. They still build simple huts and dress in traditional ways.
Hunters in Tanzania
Most cultural groups that practice traditional economies do so by choice. Though it may seem foreign to us, it is the oldest type of economy in the world.

13. Free Enterprise System
People have the right to own private property with limited government interference
Goods and Services are produced to meet the needs of the members of the family or tribe.
Free Enterprise System
The ability to make profits is what drives people to risk their money in starting new business.
The interaction of supply and demand determines prices in a free market economy .
Teacher Notes / Talking Points:
It is important for you to try to help students to get all this information into a concise idea. Something like family based economy or some other idea that helps them summarize all of these ideas together. Hopefully, they can come up with that themselves, but you may need to help them simplify the information.
This economy depends on a certain level of freedom to be successful. The freedom to buy, sell and trade is a key and should be stressed.

14. Commercial Agriculture and Industry
So how does this look?
Commercial Agriculture and Industry
Hinrich. Creative Commons September 2008.
Teacher Notes / Talking Points:
This would seem to be an obvious point, but the terminology must be clear to students to be prepared for their assessments.
I might be good to focus more on the contrast than the details.
Unlike cottage industries or subsistence farming, commercial businesses are designed to generate profit. Technology in every industry, including agriculture, is developed in response to this need for profit.

15. Most every major democracy in the world practices some form of the free enterprise system. People often call it capitalism. Most of the stronger economies in the world promote the free enterprise system (US, Great Britain, France, Chile, Canada, Japan, Germany, Singapore, etc.).
FREE
Teacher Notes / Talking Points:
Keep in mind we have used three terms to describe the same basic system. Free Enterprise, Capitalism, and Free Market. The TEKS stress “free enterprise” but “capitalism” is a more modern term. “Free Market” is less likely, but should be addressed.
You may want to address the controls on businesses here such as anti-trust, or safety concerns (gun manufacturing, Prescription Medicine, Food Safety, etc.).
Democracy
The interaction of supply and demand determines prices in a free market economy .

16. All major decisions on production, distribution and the use of resources are made by the government.
Private property is abolished; national ownership of the all land, factories, farms, and major resources.
Communism
The goal is to achieve a classless society – equality among all workers.
Communism is based on cooperation; all workers should join together and share equality.
Teacher Notes / Talking Points:
It is important for you to try to help students to get all this information into a concise idea. Something like family based economy or some other idea that helps them summarize all of these ideas together. Hopefully, they can come up with that themselves, but you may need to help them simplify the information.
There are not many communist countries left in the world, and even those that remain have levels of free enterprise. China is a good example of a communist system, that has loosened its government control of some industries.

17. Communist Factory So how does this look?
The Zaz
A factory in a communist system would often make one item which would be the same for everyone. Typically, the government might decide which car everyone would drive, what kind of clothes they might wear, etc. All industrial decisions were made to be what was “best for the people”. All factories had controls put on them from the government.
Teacher Notes / Talking Points:
The image is of a variation on the car known as the Zaz. Because most people in the soviet union could only buy the cars created at one of the four major auto plants in the country, most people essential bought the same car. Today, you can find these cars and other similar cars all over the place in Russia. For students “Imagine a country full of look alike cars”.
Ask students about what this type of system would do to individualism or competition.

18. The most well known communist government in history was the Soviet Union. This was a group of countries, including Russia, that formed together to be the largest in the world. The government of Soviet Union collapsed in 1989, and today Russia and the other countries abandoned communism for a more free system. Today, China, North Korea, Cuba and Vietnam all maintain communist systems, but many of those governments, especially China, have allowed some economic freedom within their society.
Teacher Notes / Talking Points:
Communism is a totalitarian system. This should be familiar term to students from 6th grade though it is unlikley they will remember any detail about it. They should understand that controlling governments use controlled economic systems.
Some lessons on the cold war have been provided to you. It appears students will have to understand the basics of the cold war and how it might have impacted geography of Europe and Asia.

19. The government makes decisions about production, distribution, and use of resources Other decisions are made privately.
The government should end poverty by taking control of the nation’s resources and providing public services.
Socialism
Socialism seeks a fair distribution of income. People’s basic needs are made for free or at very low cost.
Major industry is owned by the government. Other property is held privately.
Teacher Notes / Talking Points:
It is important for you to try to help students to get all this information into a concise idea. Something like family based economy or some other idea that helps them summarize all of these ideas together. Hopefully, they can come up with that themselves, but you may need to help them simplify the information.
There are not really any great examples for countries with a totally socialist system. However, several countries do base their economy on these ideals, and most countries, including the US have socialist elements.

20. Government Owned Large Factory Privately Owned Small Factory
So how does this look?
Socialism is very similar to communism in many of its philosophies, but socialism promotes private ownership of small businesses. A small factory could be owned by an individual, but a large industry that is essential such as banks, airlines, mines, etc. must be controlled by the government, which would provide the people with the services they needed to survive.
Government Owned Large Factory
Teacher Notes / Talking Points:
This is likely to be confusing, but you can discuss things like Parkland hospital, US Mail, etc. that might help them understand the basic idea. Other countries in Europe and even Canada have socialized medicine or power systems, etc.
Privately Owned Small Factory

21. Sweden and Israel base there economies on the idea of socialism, but they do have elements of free enterprise as well. Many countries throughout Europe have socialist elements, but they have began to move toward more private ownership over time.
Teacher Notes / Talking Points:
Students may not understand the basic idea of private ownership, this might be a good time to make sure they really understand the difference.

22. MIXED ECONOMIES
No country or region of the world practices one single type of economy. Depending upon a lot of different factors, each country blends these different economic systems together.
If a country is ruled by a totalitarian government system what type of economy are they likely to have?
If a country has a democratic government system what type of economy are they likely to have?
Teacher Notes / Talking Points:
Students need to understand that even though mixed economies are the norm, they must understand the others for the EOC assessment.
Totalitarian government – Command economy
Democratic Government – Free Enterprise system.
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