TALK BACK!
I’m going to ask for it back!!!!
Centrally Planned Economy
• Centrally Planned Economies Oppose …– Private property.– Free market pricing.– Competition.– Consumer choice.
•How are these things listed different in a Free market economy?
– The central government answers the Three economic questions.•How is this different than a Market
Economy?
• Socialism – (Pres. Accused?)– the belief that wealth should be
evenly distributed throughout society.– Real equality can only exist when
political equality is coupled with economic equality.
– Economic equality is only possible if the public controls the centers of economic power.
– How is this different than the Free market?
– What are some of the potential problems of socialism?
• Communism – all political and economic power rest in the hands of a central government. – The central government answers
the three economic questions.
– Communist countries are usually autocratic / authoritarian.
– Democracy does not exist.
• CORRELATE – – Exercise –
•Quickly read the pages 38 & 39.
• Exercise – “If it’s in blue I may ask you!!!!!!!!!!”– Quickly read the pages 38 & 39.
•What key terms under the Free Market Economy are absent in the Centrally Planned Economy?
– Self-interest
– Competition
– incentive
– Invisible hand
– Consumer sovereignty
• Exercise – “If it’s in blue I may ask you!!!!!!!!!!”– Quickly read the pages 38 & 39.
•What key terms from chapter one section one are absent. Why?
– wants
– entrepreneur
•What key terms from chapter one section one are present. Why?
– All terms in section 2
– All terms in section 3
– All but two terms in section 1
MIXED ECONOMIES
• How do goods, services, needs, wants, self-interests, safety nets, guns & butter, human capital, etc. create a need for a mixed economy?
• Do you agree with Adam Smith’s Laissez-faire philosophy? Why or why not?
• In a Mixed Economy… – Government provides services that
an entrepreneur normally would not consider providing.•An Army•Welfare•Education for all.•Public services.•Police protection
– Government helps to regulate the practices of businesses to protect the consumers.
• In a Mixed Economy..– Needs that markets could meet fall
to government so that all members of society can participate.
– government creates laws protecting property rights and patent laws giving people the incentive to develop new products.
– Government create laws to promote competition preventing monopolies.
• In a Mixed Economy…– some economic goals are better met
by government action.
• Mixed economies are characterized by Free enterprise – an economic system characterized by private or corporate ownership of capital goods.
• A Continuum is a range of economies with no clear divisions.– Government control can range from
total control to very little control.
Labor & human capital
Goods & services
Factor payments
Wages. Money flow
Money flows back into the factory
FACTOR MARKET
PRODUCT MARKET
Labor & human capital
Goods & services
Factor payments
Wages. Money flow
Money flows back into the factory
FACTOR MARKET
PRODUCT MARKET
GovernmentGoods & serv Goods & serv