1. Essential Question: How do economic systems answer the questions of what, how, and for whom to produce?
Instructional Approach(s): The teacher should introduce the lesson essential question.

2. Standards:
SS7E1a, SS7E5a, SS7E8a Compare how traditional, command, and market economies answer the economic questions of (1) what to produce, (2) how to produce, and (3) for whom to produce
SS7E1b, SS7E5b, SS7E8b Explain how most countries have a mixed economy located on a continuum between pure market and pure command.
Instructional Approach(s): The teacher should introduce the standards that align to the essential question.

3. Before we can discuss economic systems, we need to review the basic concepts of Economics.
What is Economics?
Instructional Approach(s): The teacher should present the information on the slide. Ask the question, what is economics, but do not answer it or ask for student answers. Click to the next slide where students are instructed to come up with their own definition of economics.

4. Activator: What is Economics?
Write your own definition of economics.
Things to think about while developing
your definition:
Products
Money
Business
Instructional Approach(s): The students should write their own definition of economics on their notes. After 1-2 minutes, the teacher should allow a few students to share their definition.

5. Economics – the choices we make about how to use limited resources to produce goods & services that meet our unlimited wants & needs.
Instructional Approach(s): The teacher should present the information on the slide

6. Hi! My name is Stan and today I am going to teach you about economics.
Instructional Approach(s): Slides 6-31 review basic economic concepts that students should have learned in elementary school. These slides are optional. A “What is Economics? Review” handout for notes is linked on the resource page to use along with the slides if desired.

7. Yesterday, when I was walking through town, I decided to go to “Bubba’s Ice Cream”. My friend Diana works there. Diana provides a service to me because she serves me ice cream. A service is any kind of work performed for others. The ice cream is a good. A good is something you can feel, or any kind of merchandise.
Bubba’s Ice Cream
Instructional Approach(s): The teacher should present the information on the slide. The students should record the information on their notes sheet if the teacher is using the supplemental document.

8. 1) 2) 3) 4)
Look at the pictures on the right. Which of these pictures show goods and which ones show services?
Instructional Approach(s): The teacher can call on students to identify the goods and services or the teacher can have the students get with a partner to discuss and then go over the answers as a class.

9. I’m sorry Stan!
I asked Diana for a double scoop of my favorite kind of ice cream: mint chocolate chip. “I am sorry Stan, we are all out of that flavor”, she said. Disappointed, I settled for vanilla.
Instructional Approach(s): The teacher should present the information on the slide

10. What is supply and demand?
The supply of mint chocolate chip ice cream at “Bubba’s” was gone because it was in high demand (wanted) by many customers. Look at the chart on the left to see what flavors are in supply at “Bubba’s Ice Cream”.
Instructional Approach(s): The teacher should present the information on the slide

11. What is supply and demand?
Supply is the amount of something available for use.
Instructional Approach(s): The teacher should present the information on the slide. The students should record the information on their notes sheet if the teacher is using the supplemental document.

12. What is supply and demand?
Demand is how much of a product or service is desired by buyers.
Instructional Approach(s): The teacher should present the information on the slide. The students should record the information on their notes sheet if the teacher is using the supplemental document.

13. Diana asked me if I would like my vanilla ice cream in a cup or a cone
Diana asked me if I would like my vanilla ice cream in a cup or a cone. I asked for a cone. Diana said I was lucky because there was only one more cone available. The little boy behind me in line wailed, “I wanted my ice cream in a cone!” I told Diana that he could have the last cone, and that I would have mine in a dish with chocolate syrup.
Instructional Approach(s): The teacher should present the information on the slide

14. There was a scarcity of cones at Bubba’s
There was a scarcity of cones at Bubba’s. Scarcity means that there are limited supply of something, and therefore, people must make choices. Look at the pictures on the right. Which pictures show a scarcity? 1) 2) 3)
Instructional Approach(s): The teacher should present the information on the slide. The students should record the information on their notes sheet if the teacher is using the supplemental document.

15. After I finished my ice cream, I said goodbye to Diana and left
After I finished my ice cream, I said goodbye to Diana and left. In the street I heard two children singing a song to the tune of “You Are My Sunshine”. It went like this:
“We are consumers! We are consumers! We are so happy when we can shop! We are consuming goods and services, But our wants just will not stop!”
Instructional Approach(s): The teacher should present the information on the slide

16. I found myself singing along to the tune
I found myself singing along to the tune. When we were finished singing I asked, “Where are you two going?”
The boy, whose name was Andy, answered: “We’ve saved up all our money and today we are going to the toy store! My sister Sara wants to buy either a rabbit or a bike and I want to buy either a basketball net or a skateboard”.
Toy Store
Instructional Approach(s): The teacher should present the information on the slide

17. What are producers and consumers?
The two children in this example are consumers. A consumer is anyone who buys a good or a service.
The toy store owner in this example is a producer. A producer is anyone who makes or grows a good or performs a service.
Consumer
Instructional Approach(s): The teacher should present the information on the slide. The students should record the information on their notes sheet if the teacher is using the supplemental document.

18. What is opportunity cost?
Andy had $65.00 to spend at the toy store. The basketball net cost $50.00, so he had to buy that instead of the skateboard, which cost $75.00.
Sara had enough money for either the rabbit or the bike. She decided to buy the bike because then she could ride bikes with her friends after school.
Instructional Approach(s): The teacher should present the information on the slide

19. Opportunity Costs Purchases
Opportunity cost is the process of choosing one good or service over another. The item that you don’t pick is the opportunity cost. The rabbit is Sara’s opportunity cost and the skateboard is Andy’s opportunity cost.
Opportunity Costs
Purchases
Instructional Approach(s): The teacher should present the information on the slide. The students should record the information on their notes sheet if the teacher is using the supplemental document.

20. What is a profit?
What Andy didn’t realize when he bought his basketball net was that the toy store owner made a large profit off of the sale. The toy store owner spent $30.00 to make the basketball net. Andy bought it for $ The toy store owner made a profit of $20.00.
Instructional Approach(s): The teacher should present the information on the slide

21. What is a profit?
Profit is the positive gain from an investment or business after subtracting expenses (opposite of loss)
Instructional Approach(s): The teacher should present the information on the slide. The students should record the information on their notes sheet if the teacher is using the supplemental document.

22. What is a loss?
The toy store owner lost money when Sara purchased the bike. The owner made the bike for $80.00, but sold it to Sara for only $ The toy store owner lost $15.00.
Instructional Approach(s): The teacher should present the information on the slide

23. What is a loss?
A loss is when the amount of money a person or company spends is more than they receive or take in. (opposite of profit)
Instructional Approach(s): The teacher should present the information on the slide. The students should record the information on their notes sheet if the teacher is using the supplemental document.

24. After the children left the toy store I decided to stay and have a look around. In the front of the store there was a magnificent toy car.
“Wow”, I exclaimed, “What a neat car! Did you make it yourself?” The toy store owner explained that it was designed by a car company, put together by Mattel, a toy company, and painted by himself. “Painting is my specialty”, he said.
Instructional Approach(s): The teacher should present the information on the slide

25. What is specialization?
The toy store owner counted on others to do the necessary work to construct the toys he sold, but then he would paint the toys himself. Specialization is when an individual or a company specializes in doing one part of a task, and relies on others to complete the other parts.
Instructional Approach(s): The teacher should present the information on the slide. The students should record the information on their notes sheet if the teacher is using the supplemental document.

26. What is interdependence?
Interdependence is when people depend on one another. Specialization results in interdependence.
Instructional Approach(s): The teacher should present the information on the slide. The students should record the information on their notes sheet if the teacher is using the supplemental document.

27. Johnson Elementary School
I said goodbye to the toy store owner and continued on my walk through town. I passed the elementary school as I rounded the corner. Public schools are services provided by the government and paid for by taxes.
Johnson Elementary School
Instructional Approach(s): The teacher should present the information on the slide

28. What are taxes?
Taxes are the money that the government collects from individuals and businesses to pay for public goods and services.
Andy and Sara both paid a 4.5% sales tax when they bought their toys. Andy paid an extra $2.25 in tax, for a total of $ Sara spent $2.93 in sales tax for a total of $67.93.
People also pay an income tax. An income tax is a percentage of money taken out of your income.
Instructional Approach(s): The teacher should present the information on the slide. The students should record the information on their notes sheet if the teacher is using the supplemental document.

29. I passed the school and saw my friend Cole walking down the street
I passed the school and saw my friend Cole walking down the street. “How are you today?”, I asked Cole.
“I am fantastic! I just thought of a new idea: a bowling ball that expands as you throw it so that it is guaranteed to knock down every pin! I am going to be famous!”
Instructional Approach(s): The teacher should present the information on the slide

30. What is an entrepreneur?
Cole is an entrepreneur. An entrepreneur is a person who comes up with a product or service, or a better way to produce one. He found the resources, the money, and the time to produce a new product.
Instructional Approach(s): The teacher should present the information on the slide. The students should record the information on their notes sheet if the teacher is using the supplemental document.

31. Goodbye!
This completes my lesson on economics! I hope you enjoyed the tour. Economics is an important part of our lives. Think of all of the ways you use economics everyday!

32. Economic Terms Review Matching Strips
Instructional Approach(s): This is an optional student activity that can be used to review the economic terms covered during the review slides. Students can work alone or with a partner to match the correct definition to the correct term.

33. Every society has productive resources:
What is Economics?
Every society has productive resources:
Land/ Natural Resources
Entrepreneurship
Human Capital/Labor
Capital/Tools
Instructional Approach(s): The teacher should present the information on the slide.

34. Productive Resources are used to produce:
What is Economics?
Productive Resources are used to produce:
Goods
Instructional Approach(s): The teacher should present the information on the slide.
Services

35. What is Economics?
However, because of SCARCITY, choices must be made to answer the Three Basic Questions of Economics.
What goods and services will be produced?
How will the goods and services be produced?
Who will consume the goods and services?
Instructional Approach(s): The teacher should present the information on the slide. This may be a good point in the lesson to do the Scarce Candy Activating activity.

36. Economic Systems

37. Economic Systems
A Country must decide how to distribute its resources to meet the needs of its people. How a country makes these decisions determines its type of economic system.
Instructional Approach(s): The teacher should present the information on the slide.

38. An Economic System is the way a society organizes the production, distribution, and consumption of goods and services.
Instructional Approach(s): The teacher should present the information on the slide.

39. Vocabulary Break
Instructional Approach(s): Individually or with a partner, the students should sort the pictures on the “Economic Systems Vocabulary Break: Production, Consumption, Distribution” handout linked on the resource page. Give students no more than 5 minutes to complete the activity. Go over the answers with the class when finished.
In small groups, sort the pictures provided as examples of production, distribution, or consumption

40. Economic Systems
There are 3 basic types of economic systems that have to answer three basic questions:
What to produce?
How to produce?
For Whom to produce?
Instructional Approach(s): The teacher should present the information on the slide

41. Economic Systems
WHAT TO PRODUCE? (What kinds of goods and services should be produced?)
HOW TO PRODUCE? (What productive resources are used to produce goods and services?)
FOR WHOM TO PRODUCE? (Who gets to have the goods and services?
The way a society answers these questions determines its economic system.
Instructional Approach(s): The teacher should present the information on the slide

42. Types of Economic Systems:
1. Traditional Economy
2. Command Economy
3. Market Economy
Instructional Approach(s): The teacher should present the information on the slide

43. Follow teacher instructions to create your Economic Systems Foldable to use for note-taking

44. Traditional Economy
An economic system in which economic decisions are based on customs and beliefs
People will make what they always made & will do the same work their parents did
Exchange of goods is done through Bartering: trading without using money
Instructional Approach(s): The teacher should present the information on the slide while the students record the important information on their Economic Systems Foldable

45. Traditional Economy Who decides what to produce?
People follow their customs and make only what is needed to take care of oneself
Who decides how to produce goods & services?
People grow & make things the same way that their ancestors did
For Whom are the goods & services produced for?
Self and trading purposes (people in the village who need them)
Instructional Approach(s): The teacher should present the information on the slide while the students record the important information on their Economic Systems Foldable

46. Traditional Economy Examples: Strengths: Predictable job and lifestyle
Villages in Africa and South America; the Inuit tribes in Canada; the caste system in parts of rural India
Strengths: Predictable job and lifestyle
Weaknesses: Lack resources and limited production
Instructional Approach(s): The teacher should present the information on the slide while the students record the important information on their Economic Systems Foldable

47. Distributed Summarizing
Draw an illustration in your foldable that represents a Traditional Economy.

48. Command Economy
Government makes all economic decisions & owns most of the property
Sometimes called communism
Examples: Cuba, former Soviet Union, North Korea
This system has not been very successful & more and more countries are abandoning it
Instructional Approach(s): The teacher should present the information on the slide while the students record the important information on their Economic Systems Foldable

49. Command Economy Who decides what to produce?
Government makes all economic decisions
Who decides how to produce goods and services?
Government decides how to make goods/services
For Whom are the goods and services produced for?
Whoever the government decides to give them to
Instructional Approach(s): The teacher should present the information on the slide while the students record the important information on their Economic Systems Foldable

50. Command Economy
Strengths: people do not have to worry about employment, housing, education, and healthcare
Weaknesses: consumers own nothing, no choices/freedom, limited innovation by individuals
Instructional Approach(s): The teacher should present the information on the slide while the students record the important information on their Economic Systems Foldable

51. Distributed Summarizing
Draw an illustration in your foldable that represents a Command Economy.

52. Market Economy
In a market economy, buyers and sellers answer the three economic questions
All resources are privately owned
Who decides what to produce?
Whatever the market demands that will produce a profit
Who decides how to produce goods and services?
Private producers (businesses)
For Whom are the goods and services produced for?
Consumers who demand the product and are willing to pay
Instructional Approach(s): The teacher should present the information on the slide while the students record the important information on their Economic Systems Foldable

53. Market Economy
Strengths: People can start their own businesses, more choice
Weaknesses: The desire for money may lead to poor quality of goods and services, business owners have to risk losing money
Instructional Approach(s): The teacher should present the information on the slide while the students record the important information on their Economic Systems Foldable

54. Distributed Summarizing:
Draw an illustration in your foldable that represents a Market Economy.

55. Distributed Summarizing:
Economic System Quotes
Instructional Approach(s): Individually, with a partner, or as a class students should read the quotes and identify which economic system to which they would apply

56. Mixed Economy Market + Command = Mixed
There are no pure command or market economies. To some degree, all modern economies show characteristics of both systems and are often referred to as mixed economies.
Most economies are closer to one type of economic system than another
For example, businesses own resources and determine what and how to produce, but the Government regulates certain industries
Instructional Approach(s): The teacher should present the information on the slide while the students record the important information on their Economic Systems Foldable

57. Mixed Economy
Most democratic countries fall in this category (there are no truly pure Market or Command economies).
Examples: U.S., Brazil, Mexico, Canada, UK, etc.
Instructional Approach(s): The teacher should present the information on the slide while the students record the important information on their Economic Systems Foldable

58. Continuum of Economies
Mixed
Pure Command
Pure Market
Instructional Approach(s): The teacher should present the information on the slide while the students record the important information on their Economic Systems Foldable

59. Economic Systems Continuum Activity
Summarizing Strategy
Economic Systems Continuum Activity
Instructional Approach(s): The students should conduct the Economic Systems Continuum Activity. The teacher should use the activity to determine student mastery of the concepts and if differentiation is needed.