Mixed Economy

Essential Question What types of economies exist in SWA today? Why do most countries have a mixed economy?

What Do You Like on a Sundae? You and your partner discuss it. What toppings do you like on an ice cream sundae? Plain Vanilla? Or absolutely everything (and I mean everything)?

What Do You Like on a Sundae? Chances are, you were somewhere between plain and everything. When discussing economies, most countries are somewhere in between too. When a country is not completely a command economy and not completely a market economy, but somewhere in between, it is called a Mixed Economy.

Mixed Economy – “In Between”

Ms. Ward’s Easy Economics All you have to do to know what type of economic system a country has is to ask yourself who is answering the economic questions. What are the economic questions? Each question will have the same general answer. Let me explain.

“Pure” Command Economies The government controls all aspects of economy. DRAWBACKS If government controlled everything in the economy, then having a diversity of products would be very difficult. With no private businesses, there would be no competition, and products would never improve and prices would be at the mercy of the government. The government could make the economy exploit the poor and benefit the rich.

“Pure” Market Economies If you make it and I want it….name the price!!!!! We’re in business!!! DRAWBACKS If an economy was pure market, people could sell anything, even things that could hurt others. Businesses could make things cost as much as they wanted. In order to make products cheaper, they could skimp on safety and benefits for workers. The government also creates business contracts for things such as military weaponry.

Most Countries Lie Somewhere in Between Most Countries Lie Somewhere in Between -However, they may be closer to one side than the other.

Economic Continuum What is a mixed economy? What are the elements of a more command economy? What are the elements of a more market economy? What types of governments would be associated with command? What types of governments would be associated with market?

Writing Prompt With your partner, answer the following questions: What bad things could happen if an economy was pure market? (Be specific, at least 3 sentences) What bad things could happen if an economy was pure command? (Be specific, at least 3 sentences).