Chapter 2 Economic Systems

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Chapter 2 Economic Systems Powered By Docstoc
					2 Minute Writing

    Identify two facts you learned in your
     reading about economic systems.
Topics of Discussion

  Key Economic Questions
  Types of Economic Systems
  Our Economic System
  Mixed Economic Systems
  Emerging Market Economies
Key Economic Questions

  What goods and services are to be
   produced?
  How should the goods and services be
   produced?
  For whom should the goods and services
   be produced?
What To Produce?

    We all differ from what we want
        Businesses CANNOT meet all of the
         people’s wants
  Use your resources wisely
  Decide which goods and services would
   best serve your nation
How To Produce?

    Business may or may not have…
      Equipment to do a job efficiently
      Man power to effectively do a job

    More capital resources = Less human
     resources
For Whom To Produce?

  Whose needs and wants are most
   crucial?
  Additional questions:
      How will the goods and services be
       distributed?
      Should the goods and services be shared
       equally among the people?
      Should people who contribute more to
       producing the goods and services be able to
       get a larger share of them?
Economic Systems
  Used to answer the key economic questions
  Custom-Based Economy (Traditional)
        Goods are produced the way they always have
         been.
    Direct (Planned) Economy
        Resources are owned and controlled by the
         government.
Types of Economies

    Market Economy
        Generally found in countries that have
         demographics forms of governments.
        Marketplace: Any place where buyers and
         sellers exchange goods, services, and some
         form of money.
    Mixed Economy
        Combines….
             Government ownership and Private ownership
             United States is a mixed economy
Answer the Economic Questions

    Teams of 6 or 7
        2 group members per question
    How would your assigned economy
     answer the economic questions?
Our Economic System
    Capitalism
        Economic resources are usually privately owned by
         individuals rather than by the government.
    Free (Private) Enterprise System
        Freedom of the individual to choose what to
         produce or buy
Our Economic System

    Private Property
        Own, use, or dispose of things of value.
  Profit
  Competition
  Freedom of Choice
        Make your decisions independently, and
         accept the consequences.
Emerging Market Economies

  More controlled environment
  All workers could get the same wages
   regardless of job title or skill level
Supply and Demand
              Key Terms
  consumer
  producers
  demand
  supply
  market price
PARTICIPATING IN A MARKET
ECONOMY
    Consumers
      Individuals) purchasing the products
      Sets demand

    Producers
      Businesses) generating the products or
       determining what’s for sale.
      Establish supply
Demand

  Quantity of goods or
   services that
   consumer is willing
   to buy.
  The Demand Curve
        Relationship
         between price and
         quantity demanded
         by consumer
Supply

  The quantity of
   goods or services
   that businesses are
   willing and able to
   provide.
  The Supply Curve
        Price and Quantity
         a business will
         supply.
Factors Determining Demand

  Customers wanting a particular product
   will result in an increase of price.
  Switching from one product to another
      No Close Substitute
      Opportunity Cost
Factors Determining Supply

  Price of the product
  Competition
  Natural Disasters
Market Price

                Supply = Demand
                Competition
Chapter 1 Review

    Due by the end of the period
     TOMORROW (9/17)

				
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posted:12/22/2012
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