Chapter 2 Review Economic systems

Economic & Social Goals Every economic system has goals Work to measure if a system is meeting the peoples needs If needs are not met people may demand laws to make changes.

Economic & Social Goals Economic freedom Economic efficiency Economic Equity – “lemon laws” Economic Security Full employment Stable prices Economic Growth

Traditional Economic systems Advantages- * people know what to make based on tradition *for whom is decided by tradition Disadvantages- * new ideas discouraged * strict social rules

Economic Systems Command Advantages: * can change direction quickly * people don’t worry about where they will work/study Disadvantages: * doesn’t meet the demand of the consumer * no incentive to work * entrepreneurs not in need Command (controlled by the government)

Economic Decisions Market Advantages: * over time can adjust to change * high level of individual freedom * small level of gov. interference * everyone has a say in the economy Disadvantages: * basic needs for everyone are not provided * gov. needs to provided highly needed services like healthcare & education * the unknown workers and businesses face

Capitalism Free enterprise economy * competition * profit motive * private property rights * economic freedom

The Entrepreneur Organizes and manages land, capital and labor in order to gain a profit Start up new businesses “want to be own boss” willing to take an economic risk to make dreams a reality

Entrepreneurs & the economy People benefit from new and better products Government benefits by having higher levels of economic activity and larger taxes

The Consumer Determine which goods are bought and produced Express their wants in the form of purchases Dollars = votes

Role of the Government Protector Provides certain public services Preserves competition

Rich in Russia 1. What advantages and disadvantages did Russians experience with a command economy? With a market economy?

Economic Systems Posters Traditional Command Market Explain how each system decides the For Whom, What and How questions every economy must answer. * Write the advantages and disadvantages of each.

Starbucks Video In what ways is the creator of Starbucks an Entrepreneur? What ideas led to the company being a success over the years?

Netflix Video How is the owner of Netflix's seen as an entrepreneur? 2. In what ways is the company meeting the wants of the consumer? 3. How is the company planning for the future.

Video Question: How did Ben and Jerry first get the idea to form an ice cream company? What made their ice cream different from others? In what ways are Ben and Jerry Entrepreneurs?  

Economic Systems Posters Traditional Command Market Explain how each system decides the For Whom, What and How questions every economy must answer.