4. North Clackamas School District Social Studies Priority Standards:  Econ 53. Describe characteristics of command, market, traditional, and mixed economies and how they affect jobs and standards of living.  Econ 59. Demonstrate the skills and dispositions needed to be a critical consumer of information.

5. WE WILL BE USING CORNELL NOTE TAKING FORMAT TODAY! Relax and enjoy the ride In Economics Class! Don’t be a victim….. Own the day!

6. I Can…. Describe The Three basic Economic Systems

7. I Can …….  USE CORNELL NOTES It is……….  30 MULTIPLE CHOICE  15 MATCHING  ONE PPC PROBLEM

8. Follow the Dancing M&Ms Today!

9. Daily Warm up Question (use your Cornell Notes) Why are some countries rich and others poor? Look at the map and write a few bullet pt. answers on your whiteboards as a group Low, Middle and High Income

10. Levels of development vary greatly among nations. High income economies [Per Capita GDP $9,386 + Middle income economies [Per Cap. GDP $765-$9,386 Low income economies [Per Cap. GDP-below $764 No data available

11. An economic system that permits the conduct of business with minimal government intervention is called free enterprise. The degree of government involvement in the economy varies among nations.

12. 1. Hong Kong 3. Ireland 5. United States 20. Belgium 31. Spain 48. France 101. Brazil 126. China 146. Russia 148. Venezuela 156. Cuba 178. North Korea

13. Three Economic Questions Every society must answer three economic questions… 1.WHAT? 2.HOW? 3.FOR WHOM? How that society answers the questions determines which type of economic system that society employs

15. Use of Money Specialization which makes workers more efficient

17. Economic activity is based on ritual, habit and custom. Everyone knows their role. Little uncertainty over what to produce or how to produce. The question of For Whom to produce is answered by custom. Life is generally stable, predictable, and continuous. Tends to discourage new ideas. Lack of progress leads to lower standard of living.

18. Examples of Traditional Economies in history:  Native Americans  Tribes in Africa  Amish Community Mbuti Pygmies (Congo)

19. Change direction drastically in a relatively short time (The USSR went from an agrarian to industrial nation in a very short time). Not designed to meet the wants and needs of individuals. Lack of incentives to work hard leads to unexpected results. Large bureaucracy for economic planning. Not flexible in dealing with minor day to day problems. People with new or unique ideas are stifled.

20. The command economy is a key feature of any communist society. China, Cuba, North Korea and the former Soviet Union are examples of countries that have command economies.

21. People and firms act in their own best interest to answer economic questions. Markets allow buyers and sellers to come together in order to exchange goods and services. Markets can adjust over time. Freedom exists for everyone involved. Relatively small degree of governmental influence. Decision making is decentralized. Variety of goods and services are produced. High degree of consumer satisfaction.

22. The primary weakness is deciding for whom to produce. The young, sick and old would have difficulty in a pure market environment. Markets sometimes fail.

23.  The most economically free countries in the world are Hong Kong, Singapore, Australia and the United States.  In a free market economy, the law of supply and demand, rather than a central government, regulates production and labor.  Companies sell goods and services at the highest price consumers are willing to pay!

24. Think: Where would you Place the U.S.? On a scale of 1 to 10 (“1” being completely Command Economy & “10” being a Free Market Economy); where would you place the United States?

25. Now Write on your Whiteboards! 5. On a scale of 1 to 10 (1 being completely Command Economy & 10 being a Market Economy); where would you place the United States? Please explain why in a well crafted detailed paragraph. We will share out in table groups 1 10 The United States probably would lie around 7 and 8 In the United States we have what is known as a MIXED ECONOMY…in fact pretty much every country is a mixed economy combining aspects of command and market economies.

27. Adam Smith was the first economist. In his book, The Wealth Nations (1776), Adam Smith explained how free markets functioned.

28.  Efficiency (maximize what you have)  Freedom (ability to make choices)  Security (goods/services will always be available)  Equity (Fairness, Opportunity)  Growth (Economy must grow with population; innovation)

29.  Laissez-faire is the doctrine that states that the government should not intervene in the marketplace.  It means “let them do (as they please)”.  In a free market, the government does not regulate the economy.

30. Father of Economics [Adam Smith] Laissez Faire Economics (No government intervention) Specialization The Wealth of Nations Self Interest The Invisible Hand 1776

31.  In a free market economy, people are free to buy and sell whatever they want.  Obviously, we DO NOT live in a completely free market economy.  There are some restrictions on what we can buy and sell.  LIST SOME NOW IN YOUR GROUP on the whiteboard please.

32. In the United States today, there are some products that we cannot legally buy. We can buy a rifle but not this gun LEGALLY.

36. Demonstration #1: Need four volunteers… –Round 1: Part A: when I say go you can try and grab as many paper clips as possible…for every paper clip that you grab you will receive one m and m

37. Demonstration#2: –Round 2: Part B: when I say go you can try and grab as many paper clips as possible from your section…for every paper clip that you grab you will get one m and m.

38. 1. Which economic system was represented by Demonstration #1 and why? 2.Which Economic system was represented by Demonstration #2 and why? 3.Create a table on the back of this Exit Ticket and Include the following information:  Three Economic Systems discussed going down the left.  Three columns of information for each system  Definition  Strengths  Weaknesses Exit Ticket 1-4 (10 Points Summative) Group Members: ______________________________________