Economics Chapter 2 Section 1&2

​Chapter 2 Sections 1&2

Use pages 38-47 in your textbook to complete this lesson.​

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​Section 1: Introduction to Types of Economic Systems

Page 38​

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Multiple Select

The 3 types of economic systems are in bold red font on pages 38-39. What are they? Choose all 3.

• Market

• Demand

• Command

• Traditional

Match

Read about the 3 types of economic systems on pg 38-39, then match them here.

• market economy

• command economy

• traditional economy

• economic system

consumers spend money however they want, and producers decide what goods/services to offer. USA

the government decides what goods will be produced, how, and who they will go to. North Korea/Cuba

based on tradition. Goal: survival and the good of the whole group. Everyone has a specific role.

how a society distributes its resources to satisfy unlimited wants of its people

• consumers spend money however they want, and producers decide what goods/services to offer. USA

• the government decides what goods will be produced, how, and who they will go to. North Korea/Cuba

• based on tradition. Goal: survival and the good of the whole group. Everyone has a specific role.

• how a society distributes its resources to satisfy unlimited wants of its people

Multiple Select

Which is an advantage of a traditional economy (page 40)?

• Little disagreement over economic goals or roles.

• Less productive than other types of economies

• You can be anything you want to be

• Lower standard of living

• 3 economic questions are already answered based on tradition

Multiple Select

Which is a disadvantage of a traditional economy (page 40)?

• Little disagreement over economic goals or roles.

• Less productive than other types of economies

• You can be anything you want to be

• Lower standard of living

• 3 economic questions are already answered based on tradition

​In a traditional economy, how much money you have is not important.

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​People who live in a traditional economy don't have the bills we have. They may not have utilities, so no utility bill. There is no grocery store or Walmart, so no shopping to pay for. They may not have cars, which means no car, gas, or insurance to pay for, etc.

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Multiple Choice

Read the section titled "Under Pressure to Change" on page 40.

True/False: The goal in a traditional economy is to get a high paying job and make a lot of money.

• False, the goal of a traditional economy is just having enough to survive.

• False, the goal of a traditional economy is to make sure everyone can do what they feel called to do.

• True. The goal of traditional economies is to move to a city and make money to take care of their family

Open Ended

In a traditional economy, you would likely learn to do whatever job your parents did. If you lived in a traditional economy, what would your job be? Would you be happy with that?

Open Ended

Page 40: Traditional economies are being introduced to modern technology, such as cell phones and social media. How do you think this will affect people who live in these economies?

​Section 2: Command Economies

Page 42-47

​Government Planning

"Government planning" is ​the term for how much of society is planned and controlled by the government.

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In the United States, this includes things like speed limits, how clean a restaurant has to be, and how much the government will collect in taxes. ​

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Multiple Select

According to your book on page 42, what might the government of a command economy control?

• What types of businesses could open in Barnwell, SC.

• How many pairs of shoes a shoe store was allowed to sell.

• Who is allowed to get a job at McDonalds

• What hours Walmart can be open.

• Exactly how much money all cashiers must be paid.

Multiple Select

Page 43 - Two types of "Command Economies"

• Capitalism

• Socialism

• Market System

• Communism

​Authoritarian system

An authoritarian system is one where the government makes very strict rules and has harsh punishments if you break the rules.​

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Example: North Korea has laws against distributing Bibles, trying to leave the country, and what kind of haircut you may get. Punishment for breaking these laws often involves imprisonment in a labor camp, torture​, or execution.

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Match

Page 43 Match the following

• Socialism

• Communism

• Authoritarian system

• Democratic Socialism

• Karl Marx

economic system in which the government owns SOME or all of the factors of production

There is no private ownership of property and no political freedom

requires absolute obedience to authority

government owns basic industries such as healthcare and food, other industries are private

believed gov't control of factors of production would solve the class struggle between rich and poor

• economic system in which the government owns SOME or all of the factors of production

• There is no private ownership of property and no political freedom

• requires absolute obedience to authority

• government owns basic industries such as healthcare and food, other industries are private

• believed gov't control of factors of production would solve the class struggle between rich and poor

​"Market" systems

The opposite of a command economy is a market system.

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In a market system, producers decide what they want to sell (without government involvement), and buyers decide what they want to buy. This type of system is based on supply, demand, and prices. What people are willing to buy and sell is the "market."

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This is similar to the economy we have in the USA.​

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Match

Use the table on Page 43 - Match who owns resources with the correct type of economy

• Communism

• Socialism

• Market

government

Government owns basic resources (like food), others are private

All resources privately owned

• government

• Government owns basic resources (like food), others are private

• All resources privately owned

Match

Use the table on Page 43 - Match how resources are allocated with the correct type of economy

• Communism

• Socialism

• Market

Government decides

Government decides how basic resources are distributed. Everything else is decided by the market

The market allocates everything

• Government decides

• Government decides how basic resources are distributed. Everything else is decided by the market

• The market allocates everything

Match

Use the table on Page 43 - Match how involved the government is with the correct type of economy

• Communism

• Socialism

• Market

Government is completely in control

Government makes basic decisions, but not all

Limited - mostly to encourage the market

• Government is completely in control

• Government makes basic decisions, but not all

• Limited - mostly to encourage the market

Open Ended

Page 45 - What does your book say about North Korea's situation under a command economy? List THREE (3) things.

​Command economies

Command economies operate on the basis that the government owns all of a countries resources (even the home you live in), and the ultimate goal is provide the basic needs (and basically ONLY the basic needs) for everyone. ​

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​For example...

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​Beef is not allowed to be produced in the small, island country of Cuba. Cuba does not have enough land for big herds of cattle. Further, chicken and pork are much more efficient to produce. Therefore, to make the most use of the resources and make sure there is enough land and milk for everyone, the Cuban government made it illegal to slaughter cattle in 1963.

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The punishment for this is 15 years in prison.​

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Multiple Select

Mark the advantages of a command economy (page 46)

• They provide for everyone (sick, old, young, poor)

• Items that don't make much profit are still produced (such as medicine)

• Economic decisions made by the government (planners) are often misguided

• Little motive to improve

• Lack of private property means no motivation to use resources wisely

Multiple Select

Mark the disadvantages of a command economy (page 46)

• Lack of individual rights

• Shortages (not enough of a product available for everyone)

• Economic decisions made by the government (planners) are often misguided

• Little motive to improve

• Lack of private property means no motivation to use resources wisely

Open Ended

Why do you think command/communist countries use authoritarian rule to maintain their economic system?

Open Ended

Which do you think has more advantages: Command or Traditional economy? Why?