Upload
steveneklein
View
229
Download
0
Embed Size (px)
Citation preview
7/30/2019 Intro to Econ/Economic Systems
1/44
7/30/2019 Intro to Econ/Economic Systems
2/44
Money is noobject
what one thing
would you mostwant to have??
7/30/2019 Intro to Econ/Economic Systems
3/44
Tesla Roadster: Electric Car that goes 0-60 mph in 3.7 secondsNEVER BUY GAS AGAIN!!!
7/30/2019 Intro to Econ/Economic Systems
4/44
Even if money not an object, only 500made every year.
7/30/2019 Intro to Econ/Economic Systems
5/44
Demand is Unlimited = EVERYBODYwants one
7/30/2019 Intro to Econ/Economic Systems
6/44
SupplyisLIMITED= Not Everyone can have one!
7/30/2019 Intro to Econ/Economic Systems
7/44
Scarcity means we must make choices
Making a choice means giving up thesecond alternative.
We call this an Opportunity Cost. (#12)
7/30/2019 Intro to Econ/Economic Systems
8/44
Scarcity demands that wefind a way to use our
LIMITED RESOURCES wisely(#2)
Making efficient use of ourresources produces ahigherstandard of living.
(#10)
7/30/2019 Intro to Econ/Economic Systems
9/44
STUDY ECONOMICS!!
Definition (#1 on handout):
The study of how a society uses its
limited resources to satisfy the unlimitedwants of its members.
7/30/2019 Intro to Econ/Economic Systems
10/44
What goods andservices will beproduced?
How will they beproduced?
For whom will theybe produced?
(Distribution) (#5)
7/30/2019 Intro to Econ/Economic Systems
11/44
How answer 3 economic questions =type of economic system used.
1). Traditionalgeneration after generation
2). Commandgovt decides
3). Marketindividual choices
7/30/2019 Intro to Econ/Economic Systems
12/44
Economic activityis based on socialcustoms (#7)
Examples:
Hunting tribes inAfrica andnorthernCanada
7/30/2019 Intro to Econ/Economic Systems
13/44
Question #1 - What is going to
be produced?
Same as ancestors in previous
generations.
7/30/2019 Intro to Econ/Economic Systems
14/44
Question #2: How Will Goods andServices be Produced?:
Roles determined by previousgenerations.
If Grandfather was a farmer then Dad
was a farmer, so are you!
7/30/2019 Intro to Econ/Economic Systems
15/44
Question #3: For Whom Will
Goods be Produced?
Distribution to same people whoreceived them in past generations.
7/30/2019 Intro to Econ/Economic Systems
16/44
7/30/2019 Intro to Econ/Economic Systems
17/44
Everyone
knows whattheir role is.
Life ispredictableand stable.
7/30/2019 Intro to Econ/Economic Systems
18/44
Discourages new ideas and newways of doing things.
Lack of progress leads to a lowerstandard of living.
7/30/2019 Intro to Econ/Economic Systems
19/44
Economic activity is planned out by thegovernmentGOVT DECIDES! (#6)
People have few choices.
Examples: Cuba
North Korea
Former Soviet Union
7/30/2019 Intro to Econ/Economic Systems
20/44
What good and services will be
produced?
Whatever the Govt tells you tomake!!
7/30/2019 Intro to Econ/Economic Systems
21/44
How will goods and services
be produced?
However the Govt tells you tomake them!!
7/30/2019 Intro to Econ/Economic Systems
22/44
For Whom will goods and services
be produced?
Distribute however the Govt TellsYou!!
7/30/2019 Intro to Econ/Economic Systems
23/44
7/30/2019 Intro to Econ/Economic Systems
24/44
Little uncertainty as to who will dowhat.
No unemployment because thegovernment gives everyone a job(whether it is needed or not).
7/30/2019 Intro to Econ/Economic Systems
25/44
Not designed to meet the wants ofconsumers.
Large bureaucracy = inefficient
Provides strange incentives
No rewards for individualperformances.
Do just enough to meet quotas.
7/30/2019 Intro to Econ/Economic Systems
26/44
People and businesses act in their ownbest interests to answer the three basiceconomic questions.
KEY IS CHOICE!!
7/30/2019 Intro to Econ/Economic Systems
27/44
Consumers andbusinesses interact
voluntarily. (#8)
Each person acts inown best interests
7/30/2019 Intro to Econ/Economic Systems
28/44
What goods and services will
be produced?
Whatever products or services
producers choose to make(customers want to buy).
7/30/2019 Intro to Econ/Economic Systems
29/44
How will goods and services be
produced?
In whatever way a providerchoosesusually the way that willmaximize profits.
7/30/2019 Intro to Econ/Economic Systems
30/44
For whom will goods andservices be produced?
For whomever chooses to
buy the product.
7/30/2019 Intro to Econ/Economic Systems
31/44
7/30/2019 Intro to Econ/Economic Systems
32/44
1.Competition
7/30/2019 Intro to Econ/Economic Systems
33/44
2. Limited Government
(Involvement)
7/30/2019 Intro to Econ/Economic Systems
34/44
3. Economic Freedom
(of Choice)
7/30/2019 Intro to Econ/Economic Systems
35/44
4. Economic Incentives
7/30/2019 Intro to Econ/Economic Systems
36/44
5. Private Property
7/30/2019 Intro to Econ/Economic Systems
37/44
1. Competition
2. Limited Government3. Economic Freedom
4. Economic Incentives5. Private Property
7/30/2019 Intro to Econ/Economic Systems
38/44
C L E E P
7/30/2019 Intro to Econ/Economic Systems
39/44
High degree of individualfreedom.
Preferences of Consumersdictate what is produced.
7/30/2019 Intro to Econ/Economic Systems
40/44
Economic decisions are made by all, not
limited to government officials.
Seemingly unlimited variety of goods
and services available.
7/30/2019 Intro to Econ/Economic Systems
41/44
Does not provide for the basic needs ofeveryone.
Some young, elderly, disabled and other
persons would be unable to survive in a marketeconomy without governmental assistance.
7/30/2019 Intro to Econ/Economic Systems
42/44
Does not providecertain services thatpeople value.
National Defense &Education.
High degree ofuncertainty
Jobs going overseas
Market Failures
7/30/2019 Intro to Econ/Economic Systems
43/44
Mixed Economy
Combination of Marketand Command.
Trying to Get the Best ofBoth Worlds!!
7/30/2019 Intro to Econ/Economic Systems
44/44
What are some features of the U.S.economy that come from:
Market economic systems?
Command economic systems?