1. Unit 1: An Introduction to Economics
Lecture & Discussion 2: Economic Systems

2. Do Now Examine the political cartoons and respond to the prompts.
Describe the scenes in both cartoons.
What statement is made by the author in Cartoon A? Cartoon B?
Where would you prefer to shop? Why?

3. Do Now
Cartoon A
Cartoon B

4. Do Now
You just identified some of the fundamental differences as well as the pros and cons of shopping in a free market versus a command economy.
In this lesson, we will examine different types of economic systems and learn the pros and cons of each.

5. Speaking of Economics Record the following terms. economic system
traditional economy
command economy
market economy
mixed economy
economic goals (e.g. freedom, efficiency, equity, growth, security, stability)

6. Essential Question
Record and consider possible responses to the essential question.
Who or what decides what you get?

7. Reading Notes Read Chapter 3.1: How Do Societies Decide Who Gets What?
Identify and explain the three basic economic questions that all societies must answer in deciding how to allocate its limited resources.

8. The Three Economic Questions
What to produce?
A society must decide whether to utilize its limited resource to produce military or consumer goods.

9. The Three Economic Questions
How to produce?
A society must decide whether to nationalize (regulate) or privatize (deregulate) its scarce resources.

10. The Three Economic Questions
For whom to produce?
Should a society distribute goods and services based on one’s ability to pay (“anyone who can afford to buy a hat can have one”)?
Or, should there be an equal distribution of wealth?

11. Reading Notes Read Chapter 3.1: How Do Societies Decide Who Gets What?
Describe the six economic goals and social values that most societies try to address while answering the three fundamental economic questions.

12. Reading Notes Read Chapter 3.1: How Do Societies Decide Who Gets What?
Term
Definition
freedom
efficiency
equity
the ability to make our own economic decisions without interference from the government
maximizing or making the most of a society’s resources
the fair and just distribution of a society’s wealth

13. Reading Notes Read Chapter 3.1: How Do Societies Decide Who Gets What?
Term
Definition
growth
security
stability
to produce more and better goods and services, which improves the standard of living
to provide “safety nets” for those who are less fortunate in society
the certainty of goods and services, predictability of prices, and availability of jobs in the market

14. Reading Notes Read Chapter 3.1: How Do Societies Decide Who Gets What?
Then, rank the six economic goals from most to least important by placing a #1-6 in the table. Which is the most important? Least? Why? Explain.

15. Reading Notes
Read Chapter 3.2: Who Decides What in Different Economic Systems?
What is an economic system?
An economic system is the method by which a society produces and distributes goods and services into the marketplace.

16. Reading Notes
Read Chapter 3.2: Who Decides What in Different Economic Systems?
Complete the Science of Scarcity flow chart.
In the process of answering the three fundamental questions, societies develop an economic system.

17. (families, tribes, villages
Reading Notes
Read Chapter 3.2: Who Decides What in Different Economic Systems?
Complete the Matrix of Economic Systems.
Economic
System
Who/What Answers Three Economic Qs?
Economic Goals
Examples   
traditional 
command
market
custom & tradition
(families, tribes, villages
Maasai in East Africa
& Inuit in Alaska
stability & security
China, Cuba & North Korea
central government
equity & security
United States, Hong Kong & Singapore
individuals
freedom & efficiency

18. Reading Notes
Read Chapter 3.3: How Do Mixed Economies Divide the Decision Making?
What is a mixed economy?
A mixed economy is an economic system in which both individuals and the government play important roles in the production and consumptions of goods and services. Most modern economies are mixed economies.

19. Reading Notes
Read Chapter 3.3: How Do Mixed Economies Divide the Decision Making?
Place the modern economies in the Continuum of Economic Systems: United States, Norway, North Korea, China & Hong Kong.
United States
China
North Korea
Hong Kong
Norway

20. Processing
You have been hired to write the lyrics to a song titled “Who or What Decides What You Get?” Your song should follow the melody of any popular tune. The lyrics must explain the difference between a market economy and a command economy. Your song must:
include four terms from the Speaking of Economics section in this lesson;
include the goals of the two economic systems;
explain the role of government as well as at least one pro and con of both systems.