Presentation on theme: "Bell-Ringer You have decided to open a pizza restaurant"— Presentation transcript:
1 Bell-Ringer You have decided to open a pizza restaurant With your group, make a list of the things that you will need to open your businessYou are starting from nothing. List everything you think you will require before you can open the doors and start serving your customers.You have five minutes to write as many as you can think of
3 ObjectiveDescribe, in general terms, the functioning of a market-based economic system
4 Classroom Rules Comply with all federal, state and district policies Do not do anything that creates unsafe or unhealthy conditions in my classroomDo not do anything that interferes with your learningDo not do anything that interferes with anyone else’s learningDo not let anyone else interfere with your learning
5 Classroom ProceduresBring and use the proper materials at the proper timeNo gum or foodDo not talk except when the activity permits or when you have a question (raise your hand first).Stay in your seat unless you have permissionDo not do work from other classes unless you have permissionListen carefully to instructions, execute them to the best of your ability, and ask if you do not understand themParticipate in the lesson by doing the correct activity at the correct time: listen, ask questions, discuss, read, write, research.
6 Vocabulary Traditional Economy Market Economy Command Economy Mixed EconomyGoods and ServicesFactors of ProductionNatural ResourcesLabor ResourcesCapital ResourcesEntrepreneursInputsWants and NeedsSupply and DemandMarketScarcitySubsidy
7 Goal of EconomiesThe goal of every economy is to satisfy the needs of the members of the group and as many of their wants as possibleNeeds – the things you must have for survival (food, water, shelter, etc.) – if you do not get them, you will probably dieWants – the things you would like to have, but your survival does not depend on your having themWants and needs are satisfied by the answers to the basic economic questions
8 Basic Economic Questions What shall we produce?How shall we produce it?How much shall we produce?Included in some lists, not included in others – it’s related to the first “how”Who gets it?
9 Economic Systems All economic systems answer the basic questions Four common systems:Traditional Economy – not relevant to the lesson; we’ll come back to it in later lessonsMarket Economy – often called “capitalism”Command Economy – often called “communism” or “socialism”, but the two are different – more on that in a later lessonMixed Economy – has elements of both market and command economies
10 Differences in Economic Systems The big difference between the systems is who answers the basic economic questionsWhen individuals answer all of the questions, the system is called “capitalist” or “market economy”Individuals do not vote on the question; they answer it through a system called “supply and demand” in an imaginary place called a “market”When government answers all or most of the questions, the system is called “communist” or “command economy”“Mixed” systems are between those two extremesMost economies are mixed; most governments help answer “how shall we make it?” in the form of rules and regulations and “what shall we produce?” in the form of subsidies
11 Factors of ProductionFactors of Production are the general categories of inputs needed to produce goods and servicesNatural Resources – the land and raw materials needed to produce the goods and servicesLabor Resources – the knowledge and physical effort needed to produce the goods and servicesCapital Resources – money; can also be human-made materials, but it’s purchased with moneyEntrepreneur – the person who puts the other three resources together to produce the goods and services
12 ScarcityAll resources are limited; there are not enough resources to satisfy everyone’s wantsBecause there is not enough for everyone, who answers “what shall we produce?” and “who gets it?” shows a difference in priority (importance)
13 Differences in Priorities In a market system, the primary focus is on satisfying individual wants and needsUpside: creativity, ingenuity and hard work are usually rewardedDownside: economic inequalityFactors of Production are usually owned by individualsIn a command system, the primary focus is on satisfying group wants and needsUpside: more economic equalityDownside: little incentive to be creative, ingenious or hard- workingFactors of Production are usually owned by the government
14 ActivityTake the list that you made in the bell-ringer activity and categorize the items on the list intoNatural ResourcesCapital ResourcesLabor ResourcesYou are the entrepreneur, so you don’t need to list that.Your group has five minutes to complete your listAt the end of that time, groups will compare their categories
15 Pizza Restaurant Entrepreneur Natural Resources Labor Resources YouNatural ResourcesThe land your restaurant is onLabor ResourcesYour employeesCapital ResourcesBuildingFurnitureTables, chairs, counters, etc.EquipmentOvens, kitchen equipment, pots, pans, utensils, etc.IngredientsFlour, yeast, cheese, toppings, etc.
16 Factors and Free Market Systems What shall we produce? PizzaYou answered that questionHow shall we produce pizza?Put the ingredients together according to your recipe, using the equipment and ingredients you bought. You answered the questionHow much pizza shall we produce?As much as customers will pay for. You and your customers answered the questionWho gets it?Whoever will pay for itWhy are you doing it? Because you expect that you will make money.