SCARCITYThe basic problemfaced by alleconomies is scarcityPeople have unlimitedwantsThe earth has limitedresources to satisfythese wants
ECONOMIC DECISIONSWhat to produce?How will we produce it?Who gets what weproduce?Shared?Sold?Given?
CANADA’S ECONOMYCanada distributes goods and services through a mixedmarket economy (mostly market but some othersystems too) Most bought and sold (through a market) Food, iPods,… Some are given to those in need social assistance, legal aid, … Some are provided for everyone education, emergency services… Some are shared Parks, sidewalks,…Government usually pays for goods and services that areprovided or shared
MARKET ECONOMIESBrings all consumers and sellerstogetherSellers Supply goods and servicesConsumers Demand goods and servicesSupply and Demand works in oppositedirectionsSuppliers want a high priceDemanders want a low priceMost efficient suppliers will sell toDemanders willing to pay the highestprice
MARKET ECONOMIESSociety gets the most it can out of itsscarce resourcesBut…Rich can buy more than poorSome people will make poorconsumption decisionspeople will buy things they don’tneedSome people won’t be able to buythings they need
COMMAND ECONOMIESGoods and servicesare distributed bygovernmentIdeally in a fair andequal way, sopeople geteverything theyneedGovernment needslots of money orresources
COMMAND ECONOMIESEveryone should have equalaccess to goods andservicesBut…Citizens have less spendingchoiceGovernment has lots of powerand controlPeople may want differentthings than what thegovernment providesThere is less incentive to workhard
CIVIC MIRRORResources, such as healthcare and energy, are limitedNeeds and wants are unlimitedThe simulation will determinehow goods are distributed(who gets what)Economic event – every springthere will be a day to buy,sell and trade
CIVIC MIRROR - PRICESSellers (suppliers) want the highestpriceBuyers (demanders) want the lowestpriceA fair price will be somewhere inbetween these amountsSomething is worth whateversomeone is actually willing to payfor it
QUESTIONS TO PONDER Should our economy be an open, free economy or should thegovernment regulate it? If a price is considered unfair, should the government step in tocontrol prices? But then it is more difficult to distribute goods because theyno longer go to highest bidder How will one determine who to sell resources to if theresources are limited? Is it okay to deny a citizen a resource if the result will be thedeath of a family member?