1. Review with Your Partners
What are goods and services?
What are productive resources?
Describe costs vs. benefits?
What is the difference between trade-offs and opportunity costs?
What is scarcity?
What is the fundamental economic problem?
Name 10 Lawndale teachers.

2. Economic Systems

3. Economic Systems
Economic System: The way a nation organizes, manages, and controls resources (factors of production) and distributes wealth/materials among the population. An economic system is defined by how these factors of production are controlled and distributed

4. Economic Systems: a Spectrum

5. Command/Centrally Planned Economy
Economic Systems
Command/Centrally Planned Economy
Market Economy
VS.
Government manages all or most resources and industries within the nation Example – Communism and Socialism
Government is not involved. Resources are distributed and shared based on “supply and demand.”

6. North Korea and South Korea at Night North Korea's GDP is $40 Billion
South Korea's GDP is $1.3 Trillion (32 times greater).

7. Mixed Economies MOST ECONOMIES IN THE DEVELOPED WORLD ARE MIXED!
Has features of both command and market economies
Most nations of the world have mixed economic systems.
People have the freedom to pursue their goals
Gov’t manages and regulates business:
imposes laws for environment, protects wildlife, ensures products are safe, etc.
Gov’t provides essential services:
Roads, police force, military, healthcare, currency, postal service, etc.
MOST ECONOMIES IN THE DEVELOPED WORLD ARE MIXED!

8. Other Economies
Traditional Economies – -Based on tradition and culture -Old, ancient economies -Do not exist in out global economy today Transitional Economies- -Economies that are in transition from a command/control economy to a Mixed Economy

9. Your Turn…
In groups of 3-4, discuss the following scenarios from the perspective of market, communist, or socialist societies. Then, vote on which system is the most effective for each scenario.

10. Scenario 1
A man who lives in the woods is cold during the winter time, so he goes into his backyard to chop down a tree for firewood. Then, he sells it to his neighbors. How would the government react?

11. Scenario 2
A farmer in this society produces twenty barrels of apples. How is the harvest used/allocated?

12. Scenario 3
An extremely talented artist wishes to make paintings and sell them to earn a living. What can the girl do?

13. Scenario 4
A boy breaks his arm while playing on the playground and he needs to get surgery. How will the boy get medical treatment?

14. Scenario 5
A medical school is accepting applications for the school year. How does it determine who is admitted?

15. Scenario 6
The nation is about to go to war. How does it prepare its military, supplies, and technology?