Market vs. command

1,178 views
1,032 views

Published on

Published in: Education
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
1,178
On SlideShare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
5
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Market vs. command

  1. 1. Free vs. Central! Economics 1
  2. 2. Learning Targets <ul><li>I understand that each economy addresses how to answer the three economic questions. </li></ul><ul><li>I can explain the functions of a market economy. </li></ul><ul><li>I can explain the functions of a command economy. </li></ul><ul><li>I can give examples of countries/nations that have used/currently use these systems. </li></ul>
  3. 3. 3 Economic Questions <ul><li>What to produce </li></ul><ul><li>How to produce </li></ul><ul><li>For whom to produce </li></ul><ul><ul><li>Essential for production! </li></ul></ul>
  4. 4. Market is better because we say so! <ul><li>Specialization </li></ul><ul><li>Key players=households and firms (businesses) </li></ul><ul><li>Profit is an incentive to produce </li></ul><ul><ul><li>Self-interest and competition! </li></ul></ul><ul><li>Monetary and non-monetary incentives </li></ul><ul><li>Laissez-faire </li></ul><ul><ul><li>Adam Smith </li></ul></ul><ul><ul><li>Invisible hand </li></ul></ul><ul><li>Consumer decides what gets produced! (consumer sovereignty) </li></ul>
  5. 5. Advantages of a Market system <ul><li>Economic efficiency </li></ul><ul><li>Economic freedom </li></ul><ul><li>Economic growth </li></ul><ul><li>Additional goals </li></ul><ul><ul><li>p.32 </li></ul></ul>
  6. 6. Command is better because “they” say so! <ul><li>Government controls allocation of resources and production. </li></ul><ul><li>Lack of consumer sovereignty </li></ul><ul><li>Government forms </li></ul><ul><ul><li>Socialism </li></ul></ul><ul><ul><li>Communism </li></ul></ul><ul><li>Collective farming </li></ul><ul><li>Lack of incentive to produce </li></ul><ul><li>Consumer goods scarce and of low quality </li></ul><ul><ul><li>Shortages </li></ul></ul>
  7. 7. Disadvantages to Centrally planned economies <ul><li>Poor quality of goods </li></ul><ul><li>Shortages of goods </li></ul><ul><li>Diminishing production </li></ul><ul><li>Sacrifice of individual freedoms </li></ul><ul><ul><li>p.38 </li></ul></ul>

×