Agenda

Discussion or quiz on articles Review Factors of Production Production Possibilities Worksheet Economic Systems, Questions and Goals Adam Smith and Karl Marx Circular Diagram of an EconomyHomework

Read N.E. Chapter 6 Review Powerpoint for next class

(online) Read “Current Reading Assignment”

(online)

Questions1. What factor of production is key to Taiwan’s

success?2. Which factor of production was important....

a. When Columbus sailed to the new world? b. During the period of colonization?c. During the industrial revolution?

3. How does this effect you in 2014?

Student Video…Four Factors of Production

http://www.youtube.com/watch?v=0TDn8pbT4ME&feature=youtu.be

a couple questions….1. A production possibilities frontier shows

(a) farm goods and factory goods produced by an economy.(b) the maximum possible output of an economy.(c) the minimum possible output of an economy.(d) underutilization of resources.

2. An economy that is using its resources to produce the maximum number of goods and services is described as (a) efficient.(b) underutilized.(c) growing.(d) trading off.

Worksheet

Production Possibilities Worksheet

Production Possibilities Handout

THREE MINUTE BREAK

http://www.online-stopwatch.com/bomb-countdown/

Economic Systems, Questions & Goals

3 Economic Three Economics SystemsQuestions Free Mixed Centrally Planned

Market Economy EconomyWhat gets Consumers role GovernmentProduced?

forHow it gets Producers GovernmentProduced? individuals

Who Income and GovernmentConsumes?

government

Economic Systems, Questions and Goals

Societies organize themselves within different systems to allocate resources to produce goods and services to achieve economic goals

The Five Economic Goals

1. Growth More stuff

2. Freedom Individuals free to choose

3. Efficiency Maximum Output

4. Security Everyone has a minimum

5. Equity Equal distribution of output (goods and services) Sharing is caring

What is the most common economic system in the world?

What is the most common economic system in the world?

ANSWER: Mixed Economies

WHY? Let’s talk about the five economic

goals

The Five Economic Goals

1. Growth More stuff

2. Freedom Individuals free to choose

3. Efficiency Maximum Output

4. Security Everyone has a minimum

5. Equity Equal distribution of output (goods and services) Sharing is caring

Take a few minutes, which goal is most important to you?

SURVEY OF THE CLASS

Which Goal is best achieved by which Economic System? Growth Efficiency Freedom Security Equity

Free Market

Centrally Planned

What is the most common economic system in the world?

ANSWER: Mixed Economies

WHY? Because societies / nations want some of each of the goals

Economic Systems, Questions & Goals

Three Economic Three Economic SystemsQuestions Free Mixed Centrally Planned

Market Economy Economy

1. What gets Consumers role Government Produced?

for2. How it gets Producers

Government Produced? individuals

3. Who Income and Government Consumes?

government

Adam Smith 1700s

What was going on in the late 1700s? Philosopher Individual (i.e. entrepreneur) creates value Focus on…

Growth Freedom Efficiency

Every individual necessarily labors to render the annual revenue of society as great as he can. He generally neither intends to promote the public interest, nor knows how much he is promoting it. He intends only his own gain, and he is, in this, as in many other cases, led by an invisible hand to promote an end which was not part of his intention.

Adam Smith

Karl Marx Late 1800s,early 1900s

What was going on in late 1800s / early 1900s?

Labor, not entrepreneur, creates value

Focus on… Equity Security

“Labour is the source of all wealth.”Karl Marx

Circular Diagram of an Economy

What type of Economics System?

Why?

What type of Economics System?

Why?

Examples of why I think people are hardwired for equity

Test results Kindergarten playground $5

Let’s go back to Economic Goals….

Winston Churchill’s Description

The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.

He advocated free market stuff

Homework Read N.E. Chapter 6 (Why Bill Gates is

so much richer than you are) Review Powerpoint for next class

(online) Read “Current Reading Assignment”

(online). Cuba (http://www.economist.com/node/21550418/print).

HANDOUTS