Call to Order The Baka Pygmies hunt and forage for their food using wooden tools for weapons and woven vines and leaves for baskets. Sometimes, when there are few animals to hunt, the Baka Pygmies decide to eat caterpillars and termites instead. What type of Economy is this? What is scarce in this situation? What is the opportunity cost of their decision? What type of Economy is this? What is scarce in this situation? What is the opportunity cost of their decision?

Objective SWBAT describe how Command and Market economies decide what to produce, how to produce, and for whom to produce by: Filling in a Graphic Organizer Watching a video clip Comparing and Contrasting the cultures that use these economies SWBAT describe how Command and Market economies decide what to produce, how to produce, and for whom to produce by: Filling in a Graphic Organizer Watching a video clip Comparing and Contrasting the cultures that use these economies

Economic Questions Who makes the decision? What is produced? How is it produced? How much is produced? For whom is it produced? Who makes the decision? What is produced? How is it produced? How much is produced? For whom is it produced? See if you can figure out which question is answered by each scenario. The move Saw VI was made with a “R” rating, because the filmmakers made it too violent for children to see. The government determines how much bread is made each year, so that none of it goes to waste. Because consumers demanded it, Apple will made a smaller ipod with a video touch screen.

This week, we will be learning about FOUR types of economies: Traditional Market Command Mixed We will explore how each of these types of economies answers the questions we’ve just learned about.

Picking Up From Where We Left Off Yesterday… Traditional Market Command Mixed Let’s examine how Apple rules the world of technology…

In a Market Economy Who decides? Businesses are privately owned (by citizens) and the owners decide how to run their companies. ( The gov’t has NO influence ) Steve Jobs (left) and Bill Gates (right) run Apple and Microsoft, two of the world’s most successful computer companies.

In a Market Economy What is produced? Businesses determine what to make by examining what the consumers demand. These things got made because people wanted them… believe it or not.

In a Market Economy How is it produced? The owners run their factories and make the goods in the most cost- effective way possible so they can make a profit. In a Market economy, factories will determine if it’s cheaper to use machines or human labor to complete a task.

In a Market Economy How much is produced? The Law of Supply and Demand determines price. If Demand is HIGH and Supply is LOW, the price goes UP. If Demand is LOW and Supply is HIGH the price goes DOWN These “Market Forces” are why Nintendo Wiis were being sold on Ebay for $400 last X-Mas

In a Market Economy For whom are things produced? The consumers (people with $ who buy goods) The goal of businesses in a Market Economy is to make money, so they want to make goods that you’ll want to spend a lot of money on.

We’re Making Progress! Traditional Market Command Mixed Let’s see how the old Soviet Union used to do things…

In a Command Economy Who decides? All aspects of the economy are decided by the government. As you can see in the picture, the gov’t has total control over businesses and the economy. the gov’t Businesses

In a Command Economy What is produced? not The gov’t determines what the citizens need and then has factories produce them. Luxury items (BMWs, ipods) are not a priority. Citizens have few choices. In the Soviet Union, a great deal of production was focused on weaponry because the gov’t believed that a well equipped military was of the highest importance.

In a Command Economy How is it produced? The government owns and operates the factories. It determine how much goods will cost and how much workers will be paid. Above, workers in North Korea work long shifts in government factories because the gov’t requires them to.

In a Command Economy How much is produced? The gov’t makes only as much as it thinks it will need. There are often shortages of goods when the gov’t doesn’t make enough. Empty market shelves, like the ones above, were pretty common in the Soviet Unions command economy, because its gov’t didn’t plan well.

In a Command Economy For whom are things produced? For the citizens, but they have little say in what is made. Everyone is probably waiting in line for their no frills generic cola because there’s no Pepsi in the Soviet Union.

Where’s it going? Take the Scenario that was given to your group and place it in the proper box. Market EconomyCommand Economy