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Warm Up
Answer the following prompt
1. If you would like Doritos, how would you get them?
2. If you live in a totalitarian government, how would you get those Doritos.
TPO
• We will create a story board using notes over free-enterprise and command economies.
Economic Systems
An economy consists of the production and exchange of goods and services among a
group of people .
Traditional Economies
• Goods and services are traded without exchanging money (aka: a “barter” system)
Ex: Tribal and rural areas of South America, Africa, and Asia.
Free-Enterprise System• The production of goods and services is
determined by consumer demand. Government has little influence in business.
Free-Enterprise SystemPRICE- the value of the things we buy are
determined by supply (how many there are) and demand (how much we want it)
Expensive Not Expensive
Coach Purse
$350
Grandma’s Purse
$5
Because no one wants to buy grandma’s purse, it is much less expensive.
Free-Enterprise SystemQuantity- How much companies make of a
good is determined by demand (how much we want it).
Very Popular Not so popular
iPHONE 5
Over 2 million pre-ordered
PANTECH PN-218
150,000 pantech pn-218 produced
Free-Enterprise SystemOwnership- People own property.
Free-Enterprise SystemExamples of countries that have Free-
Enterprise Systems
The United States, Canada, Japan
Communist Economic System
• Production of goods and services is determined by a central government which usually owns the means of production. Production does not necessarily reflect consumers demand. (aka socialist & communist economies)
Communist Economic System
Communist Economic System
PRICE- the value of the things people buy are determined by the government.
Kim Jung Un says:
“Bread = $10.”
One of the problems with a command economy is that prices do not represent the value of things sold.
Communist Economic System
Quantity- How much there is of a good is determined by the government.
Kim Jung Un says:
“We will only make 10 loaves
today.”Another problem with Command Economies is that governments often have very little idea how much to make.
Communist Economic System
Ownership- The Government owns everything and lends it out to people.
Kim Jung Un of North Korea
Perhaps the biggest problem that Command Economies have is that there is little reason to innovate since, no one owns property..
Communist EconomyCountries that have Command Economies:
Cuba, Burma, North Korea
Draw a T-Chart in your notes
Political System Economic System
Which economic system would these political systems use?Fill out your T-Chart
Political System Economic System
1. Totalitarian
2. Republic
3. Democracy
4. Theocracy
5. Monarchy
6. Dictatorship
Communist
Free-Enterprise
Free-Enterprise
Communist
Free-Enterprise OR Command
Communist
Concept Storyboard
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Complete the concept story board to show your knowledge of the three types of economic systems we discussed. You will include a small cartoon as well as a description in your own words of the economic system. Also make sure to include examples of those places.
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