This is a YesThis is a Yes

This is a noThis is a no

This is a yesThis is a yes

This is a noThis is a no

This is a noThis is a no

This is a yesThis is a yes

This is a yesThis is a yes

This is a noThis is a no

This is a noThis is a no

This is a yesThis is a yes

This is a noThis is a no

This is a yesThis is a yes

What’s the difference between What’s the difference between the “yes/no” images? the “yes/no” images?

Record your brainstormRecord your brainstorm– Individual Brainstorm:Individual Brainstorm:

– Group BrainstormGroup Brainstorm

Goods and Services Definition:Goods and Services Definition:Two basic distinctions of things that can be Two basic distinctions of things that can be

bought, sold, or traded in any economic systembought, sold, or traded in any economic system

GoodGood: Buyable item that can be physically : Buyable item that can be physically handled handled What are the two types of goods we learned What are the two types of goods we learned about?about?

ServiceService: Buyable item that can be purchased but : Buyable item that can be purchased but not physically handled. not physically handled. What are some examples? What are some examples?

What’s the difference between What’s the difference between the “yes/no” images? the “yes/no” images?

Remember the Three Remember the Three Questions...Questions...

All market types operate differently. This is due to All market types operate differently. This is due to the fact that they each have different answers to the fact that they each have different answers to the three basic questions of economics. List the three basic questions of economics. List those 3 questions below:those 3 questions below:

1. What should I produce?1. What should I produce?

2. How should I produce it?2. How should I produce it?

3. Who should I produce it for?3. Who should I produce it for?

Let’s keep the concepts of those basic Let’s keep the concepts of those basic questions, but change the wording to questions, but change the wording to reflect the manufacturing of – say – any reflect the manufacturing of – say – any goodgood. . Doing so will help us to be able to Doing so will help us to be able to look at any economic system, and look at any economic system, and determine its type.determine its type.

1.1. What determines how the good is What determines how the good is produced?produced?

2.2. How is the good produced?How is the good produced?

3.3. Who will receive the goods produced?Who will receive the goods produced?

Remember the Three Remember the Three Questions...Questions...

Types of MarketsTypes of Markets

____________ System____________ System

Based onBased on: What traditions exist in : What traditions exist in society society

StrengthsStrengths: Everyone knows what roles to : Everyone knows what roles to play; stable, predictableplay; stable, predictable

WeaknessesWeaknesses: Discourages new ways of : Discourages new ways of thinking; lack of progress and changethinking; lack of progress and change

Types of MarketsTypes of Markets

____________ System____________ System

Based onBased on: What the government decides is best : What the government decides is best for people for people

StrengthsStrengths: Theoretically, everyone is provided : Theoretically, everyone is provided for; can change in a short amount of timefor; can change in a short amount of time

WeaknessesWeaknesses: Ignores guide to economic : Ignores guide to economic reasoning; requires large government – reasoning; requires large government – inefficientinefficient

Little/no room for individual creativity – new Little/no room for individual creativity – new ideas discouragedideas discouraged

Types of MarketsTypes of Markets

____________ System____________ SystemBased onBased on: The desires of individuals and firms: The desires of individuals and firms

StrengthsStrengths: Individual freedom: Individual freedomIncredible variety of goods and Incredible variety of goods and

servicesservicesAble to adjust gradually to changeAble to adjust gradually to changeLack of government interferenceLack of government interference

WeaknessesWeaknesses: Rewards only productive individuals : Rewards only productive individuals Must protect itself against market Must protect itself against market

failures (depressions)failures (depressions)

What type of market system What type of market system does the US have?does the US have?

What are your predictions?What are your predictions?

In reality, the United States does not In reality, the United States does not have a pure market system, instead have a pure market system, instead it has what is known as a mixed it has what is known as a mixed market system.market system.

Mixed Market SystemMixed Market System

Why is the economy of the United Why is the economy of the United States called a mixed market States called a mixed market system? system?

Characteristics of Our Characteristics of Our SystemSystem

Characteristics of Our Characteristics of Our SystemSystem

Freedom of ChoiceFreedom of Choice Private PropertyPrivate Property Profit Motive!Profit Motive! CompetitionCompetition Freedom of business owners to make Freedom of business owners to make

decisions about what they selldecisions about what they sell (Relatively) Limited Government(Relatively) Limited Government

Types of Economic SystemsTypes of Economic Systems

We’ve looked to the answers to We’ve looked to the answers to three questions when determining three questions when determining the type of market system at hand:the type of market system at hand:

1. 1. 2. 2. 3. 3.

To determine the type of Economic To determine the type of Economic System, we will look to the answer System, we will look to the answer to one final question: Who controls to one final question: Who controls the means of production? the means of production?

Types of Economic SystemsTypes of Economic SystemsWho controls the Who controls the means of production? means of production? (Who are the decision (Who are the decision makers?)makers?)

Which countries are Which countries are associated with these associated with these “decision makers”?“decision makers”?

Types of Economic SystemsTypes of Economic SystemsWho controls the Who controls the means of production? means of production? (Who are the decision (Who are the decision makers?)makers?)

Type of EconomyType of Economy