Agenda Read N.E. Chapter 6 Review Powerpoint for next class (online) Discussion or quiz on articles Review Factors of Production Production Possibilities Worksheet Economic Systems, Questions and Goals Adam Smith and Karl Marx Circular Diagram of an Economy Homework Read N.E. Chapter 6 Review Powerpoint for next class (online) Read “Current Reading Assignment” (online)

Questions What factor of production is key to Taiwan’s success? Which factor of production was important.... When Columbus sailed to the new world? During the period of colonization? During the industrial revolution? How does this effect you in 2014?

Student Video…Four Factors of Production http://www.youtube.com/watch?v=0TDn8pbT4ME&feature=youtu.be

a couple questions…. 1. A production possibilities frontier shows (a) farm goods and factory goods produced by an economy. (b) the maximum possible output of an economy. (c) the minimum possible output of an economy. (d) underutilization of resources. 2. An economy that is using its resources to produce the maximum number of goods and services is described as (a) efficient. (b) underutilized. (c) growing. (d) trading off.

Worksheet 5

Production Possibilities Worksheet

Production Possibilities Handout

THREE MINUTE BREAK http://www.online-stopwatch.com/bomb-countdown/

Economic Systems, Questions and Goals Societies organize themselves within different systems to allocate resources to produce goods and services to achieve economic goals Economic Systems, Questions & Goals 3 Economic Three Economics Systems Questions Free Mixed Centrally Planned Market Economy Economy What gets Consumers role Government Produced? for How it gets Producers Government Produced? individuals Who Income and Government Consumes? government 9

The Five Economic Goals Growth More stuff Freedom Individuals free to choose Efficiency Maximum Output Security Everyone has a minimum Equity Equal distribution of output (goods and services) Sharing is caring 10

What is the most common economic system in the world?

What is the most common economic system in the world? ANSWER: Mixed Economies WHY? Let’s talk about the five economic goals

The Five Economic Goals Growth More stuff Freedom Individuals free to choose Efficiency Maximum Output Security Everyone has a minimum Equity Equal distribution of output (goods and services) Sharing is caring Take a few minutes, which goal is most important to you? SURVEY OF THE CLASS

Which Goal is best achieved by which Economic System? Growth Efficiency Freedom Security Equity Free Market Centrally Planned 14

What is the most common economic system in the world? ANSWER: Mixed Economies WHY? Because societies / nations want some of each of the goals 15

Economic Systems, Questions & Goals Three Economic Three Economic Systems Questions Free Mixed Centrally Planned Market Economy Economy 1. What gets Consumers role Government Produced? for 2. How it gets Producers Government Produced? individuals 3. Who Income and Government Consumes? government

Adam Smith 1700s Philosopher Focus on… What was going on in the late 1700s? Philosopher Individual (i.e. entrepreneur) creates value Focus on… Growth Freedom Efficiency

Every individual necessarily labors to render the annual revenue of society as great as he can. He generally neither intends to promote the public interest, nor knows how much he is promoting it. He intends only his own gain, and he is, in this, as in many other cases, led by an invisible hand to promote an end which was not part of his intention. Adam Smith

Karl Marx Late 1800s,early 1900s What was going on in late 1800s / early 1900s? Labor, not entrepreneur, creates value Focus on… Equity Security

“Labour is the source of all wealth.” Karl Marx

Circular Diagram of an Economy

What type of Economics System? Why?

What type of Economics System? Why?

Let’s go back to Economic Goals…. Examples of why I think people are hardwired for equity Test results Kindergarten playground $5

Winston Churchill’s Description The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries. He advocated free market stuff

Homework Read N.E. Chapter 6 (Why Bill Gates is so much richer than you are) Review Powerpoint for next class (online) Read “Current Reading Assignment” (online). Cuba (http://www.economist.com/node/21550418/print).

HANDOUTS