Graph the following.

Possibilities T-Shirts Hats

A 500 0

B 400 175

C 300 300

D 200 350

E 100 400

F 0 500

Which of the following combination of producing hats and t-shirts is impossible. 175 hats and 400 t-shirts 350 hats and 425 t-shirts 100 hats and 100 t-shirts

What is the opportunity cost of producing 100 t-shirts?

Economic Systems and the American System

Section 1

All economic systems face the same basic questions.

But first… What is an economic system?

The way in which a nation uses its resources to satisfy its people’s needs and wants

Trade-off: sacrificing one good or service to purchase or produce another Example: if you choose to buy an iPod,

you are exchanging your income for the right to own the iPod.

The Cost of Trade-Offs Opportunity Cost: the value of the next

best alternative given up for the alternative that was chosen

The “way it’s always been done”Career is what your parents did (ie. Fisherman)

•All individuals will have a job.•All your needs are provided.•Everyone has equal amounts of resources

MARKET SYSTEM (AKA CAPITALISM) DECISIONS ARE MADE BY THE CONSUMERS

Market—more than just a “place” – it’s a voluntary exchange of goods and services between buyers and sellers

1. What type of Economic system does the United States follow most closely to?

2. Give an example of a country that is primarily a command economy.

3. Who controls the factors of production in a market economy?

You will be divided into groups. Remember your number.

1. What type of Economic system does the United States lean most closely to?

2. Give an example of a country that is primarily a command economy.

3. Who controls the factors of production in a market economy?

Follow Along as I read the handout allowed. Be sure to take notes about any added information that I give you.

You will have about 10 – 15 minutes to develop a specific plan for your groups survival. All 3 questions must be answered in great detail. Each item should be used within the plan!!!

• Be able to answer the following once you hear everyone’s plan:– What were some trade offs you made?– Were everyone in the groups wants and

needs satisfied equally? How?– Were there any problems or things you

forgot to do that may have hindered your survival?

– What shortages did you have?– How did you overcome those shortages?

Charts in Motion

http://glencoe.com/sites/common_assets/socialstudies/in_motion_08/ett/Figure2-2.swf

Businesses Sell goods and services to individuals

Individuals pay for goods and services they buy from business

Businesses pay for resources they buy from individuals

Individuals sell resources to businesses

Businesses Pay Taxes

Individuals Pay Taxes

Gov’t benefits to businesses

Gov’t benefits to individuals

1. Fill in the arrows indicating what is exchanged between the 2 groups.

A.

B.

C.

Governmental Role has increased since 1880’s in the U.S.

Often called “Laissez Faire” when pure capitalism exists which means let them do as they choose in French

Includes regulations, laws and taxation

You are allowed to own your own business

You are able to earn a profit or lose everything

You must still follow government guidelines and regulations

Name 5 businesses in Lincoln that are privately owned.

Freedom of Choice

Buyers make the decisions about what should be produced

Government has little say in what is produced

Think of something you have purchased that you did not like. Did you ever purchase that item again? Have you ever wanted to purchase something but could no longer find the product? What was it?

Profit Incentive

Profit is what is left when all of the businesses costs have been paid

If profits are not realized the business will fail

Can you think of two or three similar products sold by different companies that have the same or similar prices?

Competition

Profits encourage others to be competitive

Competition leads to efficient use of resources

Name a product that has a lot of competition.

Name a product that has little or no competition.

Private Property

Allows individuals to own property Protected by the Constitution

Make a list of 5 items that you own. Which of these items could be used to generate wealth?

1. Horatio has purchased a new car. He wants to use it to deliver pizzas while he works.

2. In my neighborhood, we have a Hy-Vee grocery store and a Russ’s IGA.

3. Cindy has decided to open her own coffee house near the community college.

4. Hank runs a taco stand downtown during lunch. He earns about $200 per day. He would like to make even more money and is thinking about opening another stand near the mall.

5. Buster has been told by the health inspector that he and his employees must wear gloves and hair nets when serving ice cream at his business or they will be shut down.

6. Vanessa was going to go to Subway for lunch today instead she decided to go to Taco Inn because they were having a sale on Taco’s.