1. Every Society Must Answer 3 Questions: What goods will be produced? How will the goods be produced? For whom will the goods be produced? Economic System: the way in which a society decides to answer the 3 questions above- in the end, will government, the people or some kind of a mix of both decide?

3. The Rock, Paper and Scissors Game and Marxist Theory

5. Economic Systems Market economy : capitalism Command economy: socialism, communism Traditional Economy (Ex: Chad, Haiti, Rwanda) Mixed economy-mixed w/ elements of both socialism and market

6. Market Economies-some are more free than others (Capitalism) Resources are owned and controlled by the people Economic decisions are made by the people competing to earn profits Individual freedom is considered very important Economic decisions are made by the basic principles of supply and demand Profit is the motive for increasing work There are many economic freedoms There is competition among businesses Competition determines price which increase the quality of the product More freedom of thought, religion and speech

7. Capitalists (Free market economy) All countries that practice capitalism are actually mixed economies and include some socialist elements, but you can say that the following countries are just a few of many who lean more more capitalist: 1. The United States 2. Great Britain 3. South Africa 4. Israel 5. The Dominican Republic 6. Germany 7. Japan 8. South Korea

8. Which countries are the most capitalist? http://images.flatworldknowledge.com/barkan/barkan -fig13_001.jpg http://images.flatworldknowledge.com/barkan/barkan -fig13_001.jpg

9. Socialism Government owns the businesses Goal: to redistribute wealth between rich and poor Final Goal eventually: classless society-no rich or poor (economic equality)

10. Socialism-2 types 1. Marxist-Leninism (Marxist Socialism)-most extreme form-also called communism 2. European-Style Socialism

11. Marxist-Leninism Socialism The government makes all decisions and determines how resources will be used No freedom of speech, press or thought There is no competition Businesses are not run to create a profit Called Communism in countries that use it Healthcare is free and controlled by the gov’t Consumers have no choices in the market place Factories are concerned with quotas Shortages are common because of poorly run factories and farms The government dictates the job in which you work The government sets the prices of all goods and services Religion is either forbidden or heavily monitored by the govt Based on the writings of Karl Marx and Vladimir Lenin

12. European-Style Socialism The government makes many decisions and determines how much of the resources will be used Allows some capitalism High tax rates (50% or more) on the rich Some individual freedom Some competition Businesses run to create a profit, but heavily regulated by the Govt Called Democratic Socialism in counties that use it Healthcare is usually free and controlled by the gov’t-heavily funded by taxes on the rich Consumers have fewer choices in the market place The government sets some of the prices of goods and services like the same gas price at all gas stations across the country

13. European-Style Socialists (command economy) 1. France 2. Russia 3. Spain 4. Germany 5. Canada 6. Portugal 7. Argentina 8. Brazil

15. Communists-most extreme socialism- “Marxist/Leninist Socialism” There has never been a purely communist country as Karl Marx described with no government and a completely classless society The following countries are ruled by Communist party and call themselves Communists, but they are actually extreme Marxist socialist: (only 18 years ago there were over 20 countries) 1. Cuba 2. China 3. North Korea 4. Vietnam 5. Laos

17. Mixed Economies-some lean more free market capitalist and some lean more command or socialist Government and individuals share the decision making process Government guides and regulates production of goods and services offered Individuals own means of production Protects consumers and workers from unfair policies Most effective economy for providing goods and services Technically, most of world’s economies fall into this category Some are mixed, but more socialist…some are more socialist