1. Chapter 2.4: Mixed Economies

2. Bell Ringer Discussion
On a piece of paper, list three examples of ways in which the U.S government or state government provides goods/services or regulates how goods/services are provided.
Share
What would happen if those were privately owned?
Why do you think our gov’t intervenes in the market in instances we stated?
After first bullet hear student’s answers…create discussion of “what would happen if those all were owned by private businesses?”

3. The Rise of Free Markets
Even free market thinkers like Adam Smith recognized the need for a limited degree of government involvement in the economic marketplace.
In a mixed economy, the market is free but has a certain degree of government control

4. Introduction What are the characteristics of a mixed economy?
A mixed economy is characterized by:
A market-based economy with some government intervention
Government helps societies meet needs that would be too difficult for them to meet under a totally free market economy, such as education
Government protects property rights and ensures that exchanges in the marketplace are fair

5. The Rise of Free Markets
Since Adam Smith’s time, government intervention in the market has increased.
Laissez faire
Belief that gov’t generally should not intervene in the marketplace

6. The Rise of Free Markets, cont.
What is one reason the government plays a role in the economy?
The government:
Provides national defense and public education
Protects private property
Ensures fair exchanges in the marketplace
(Laws require businesses to give honest information to consumers)
Checkpoint Answer: Provides national defense and public education, protects private property, and ensures fair exchanges in the marketplace.

7. Reebok Pays $25 Million to Settle FTC Claims of False Ads for Toning Shoes

8. How do we know? Car’s horsepower?
Explain without gov’t intervention a company could say whatever it wanted
Phones/ipad – could state it had whatever speed it wanted

9. The Rise of Free Markets
Since Adam Smith’s time, government intervention in the market has increased.
Mixed economy
Market-based economic system in which the gov’t is involved to some extent.

10. Circular Flow Model of a Market Economy
Briefly look at slide, see if anyone understands it, then show video on next slide

11. Circular Flow Model of a Mixed Economy
Answers: 1. By taxing firms and households and spending money in the product market and the factor market. 2. Answers will vary.

12. Comparing Mixed Economies
Most modern economies are mixed economies.
The figure below shows a continuum of mixed economics in today’s world.
Why is China a little bit farther to the right on the diagram below than Cuba?
Answers: Because China is moving toward a more free market based economy.

13. North Korea and China
China, is closer to the center of the because they are going through an economic transition toward privatization of state-owned firms.

14. Hong Kong- All the way on the right!?!?!
Hong Kong represents one of the world’s freest markets.
The government protects private property and rarely interferes in the free market, aside from establishing wage and price controls on rent and some public services.
Wait!? Isn’t Hong Kong part of China?
It is. It operates under a “One country, two systems” policy.
Hong Kong has it’s own money
Need a visa to enter China from Hong Kong

15. Head-to-Head Battle pg 42
Helmet Makers
Doctors
State Gov’t
Anti-helmet lobbyists
Once in groups, use the article and internet to support your belief! Are you for or against helmet laws? Assume we live in PA
Map

16. Mixed Economies
Economic transition- period of change when a nation moves from one economic system to another
“8 Ways Privatization Has Failed America”
On my Wiki, skim it, discuss
Privatization
Gov’t sells business/service to individuals and allows them to compete in the marketplace.

17. So what’s our economy!?
Market economy by definition – “an economy in which the resources are owned and controlled by the people of the country”
The United States is a mixed economy whose foundation is the free market.
It is characterized as a free enterprise system.

18. Mixed Economies
In a F.E.S, investments in firms are made in a free market by private decision…gov’t has no say!
Free enterprise system
Economic system characterized by private OR corporate ownership of goods.