1. Standard SSEF4a- Compare the different economic systems
SSEF5a. Explain why the gov’t provides for the people.
SSEF5b. Give Examples of gov’t regulation and deregulation and its effects.

2. Mixed Economy
A mixed economy has elements of both market and command economies
Individual buyers and sellers often have the right to decide how scarce resources are allocated
The government plays a role when needed
Market
Command
Mixed

3. Examples of Mixed/ Market Economies
North American countries
European Countries

4. Resolving Market Failures A market failure is a situation where markets fail to allocate resources efficiently.
Command
No market failures
No markets
Mixed
The government regulates
Market
Buyers and sellers
Survival of the fittest

5. Market failure
A market failure can happen when of these four conditions are not met
1. Adequate Competition
2. Well informed buyers and sellers
3. Resources to move from one industry to another
4. Reasonable Prices

6. Correcting market failures in a mixed-market economy
The government tries to keep the market competitive and provide public goods and services so market failures don’t occur.
They can also regulate industries to prevent market failures.

7. Characteristics of Mixed Market The Government
Protector
Provider and Consumer
Regulator
Promoter of National Goals

8. Characteristics of Mixed Economy Gov’t Regulation & Deregulation
Regulation-tighter restrictions and rules companies must follow
Deregulation- relaxing rules and laws companies must follow

9. Maintaining Competition in a mixed-market economy
The government uses regulation and deregulation to make sure industries:
stay competitive
products are safe for consumers
working conditions are safe/fair

10. Examples of government intervention:
Regulation
Deregulation
FDA-food and drug safety
EPA- environmental safety
FDIC- protection within the banking system
18th Amendment
Phone Companies
Banks
Airlines
21st Amendment

11. The government provides Public Goods
Public goods are consumed without paying for them so the government provides them through tax dollars if people want them.
Individuals or private businesses wouldn’t provide
Most goods and services are private

12. 2 Characteristics of Public Goods:
Shared Consumption
When one person consumes a public good, it does not prevent others from consuming the good.
Non-exclusion
Once a public good is produced, it is difficult or impossible to exclude others from consuming the good, even if they didn’t pay for it.
Public Good

13. Redistribution of Income
Tax those with large income and help those in need
Examples:
Welfare
Medicare
Unemployment
Social Security
Healthcare?

14. Stabilize the Economy
Reduce unemployment and inflation, and promote economic growth

15. Allocating Resources Command: government makes all the decisions
Market: consumers decide by their purchases
Mixed: government provides minimal guidance and regulations for production of goods/services

16. Incentives Command: None
Market: High. Driving force (profit) of efficiency and productivity.
Mixed: High. Profit is the major incentive of efficiency and productivity.

17. Profit Motive Command: does not exist. Government makes all decisions.
Market: system is driven by profit. Survival of the fittest.
Mixed: Profit is the driving force. Tends to be socially conscious.

18. Consumer Sovereignty
Command: consumers have little say. Government makes all decisions.
Market: focus is on consumer goods and what consumers will buy, high consumer satisfaction
Mixed: high degree of seller/buyer autonomy determines supply and demand

19. Competition Goal: price stability
Command: individual initiative is unrewarded, no competition
Market: very stiff competition, survival of the fittest
Mixed: government gets involved when businesses/individuals get too powerful/rich

20. Government Regulation
Goal: competition and food/workplace safety
Command: all decisions made by government. Red tape slows things down.
Market: Very little government interference, if any.
Mixed: directs industry into needed areas, little interference