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Prac. Econ - Unit II, Packet I: Types Of Markets


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Prac. Econ - Unit II, Packet I: Types Of Markets

  1. 1. This is a Yes
  2. 2. This is a no
  3. 3. This is a yes
  4. 4. This is a no
  5. 5. This is a no
  6. 6. This is a yes
  7. 7. This is a yes
  8. 8. This is a no
  9. 9. This is a no
  10. 10. This is a yes
  11. 11. This is a no
  12. 12. This is a yes
  13. 13. What’s the difference between the “yes/no” images? <ul><li>Record your brainstorm </li></ul><ul><ul><li>Individual Brainstorm: </li></ul></ul><ul><ul><li>Group Brainstorm </li></ul></ul>
  14. 14. <ul><li>Goods and Services Definition: </li></ul><ul><li>Two basic distinctions of things that can be bought, sold, or traded in any economic system </li></ul><ul><li>Good : Buyable item that can be physically handled </li></ul><ul><li>What are the two types of goods we learned about? </li></ul><ul><li>Service : Buyable item that can be purchased but not physically handled. </li></ul><ul><li>What are some examples? </li></ul>What’s the difference between the “yes/no” images?
  15. 15. Remember the Three Questions... <ul><li>All market types operate differently. This is due to the fact that they each have different answers to the three basic questions of economics. List those 3 questions below: </li></ul><ul><li>1. What should I produce? </li></ul><ul><li>2. How should I produce it? </li></ul><ul><li>3. Who should I produce it for? </li></ul>
  16. 16. <ul><li>Let’s keep the concepts of those basic questions, but change the wording to reflect the manufacturing of – say – any good . Doing so will help us to be able to look at any economic system, and determine its type. </li></ul><ul><li>What determines how the good is produced? </li></ul><ul><li>How is the good produced? </li></ul><ul><li>Who will receive the goods produced? </li></ul>Remember the Three Questions...
  17. 17. Types of Markets <ul><li>____________ System </li></ul><ul><li>Based on : What traditions exist in society </li></ul><ul><li>Strengths : Everyone knows what roles to play; stable, predictable </li></ul><ul><li>Weaknesses : Discourages new ways of thinking; lack of progress and change </li></ul><ul><li> </li></ul>
  18. 18. Types of Markets <ul><li>____________ System </li></ul><ul><li>Based on : What the government decides is best for people </li></ul><ul><li>Strengths : Theoretically, everyone is provided for; can change in a short amount of time </li></ul><ul><li>Weaknesses : Ignores guide to economic reasoning; requires large government – inefficient </li></ul><ul><li>Little/no room for individual creativity – new ideas discouraged </li></ul>
  19. 19. Types of Markets <ul><li>____________ System </li></ul><ul><li>Based on : The desires of individuals and firms </li></ul><ul><li>Strengths : Individual freedom </li></ul><ul><li>Incredible variety of goods and services </li></ul><ul><li>Able to adjust gradually to change </li></ul><ul><li>Lack of government interference </li></ul><ul><li>Weaknesses : Rewards only productive individuals </li></ul><ul><li>Must protect itself against market failures (depressions) </li></ul>
  20. 20. What type of market system does the US have? <ul><li>What are your predictions? </li></ul><ul><li>In reality, the United States does not have a pure market system, instead it has what is known as a mixed market system. </li></ul>
  21. 21. Mixed Market System <ul><li>Why is the economy of the United States called a mixed market system? </li></ul>
  22. 22. Characteristics of Our System
  23. 23. Characteristics of Our System <ul><li>Freedom of Choice </li></ul><ul><li>Private Property </li></ul><ul><li>Profit Motive! </li></ul><ul><li>Competition </li></ul><ul><li>Freedom of business owners to make decisions about what they sell </li></ul><ul><li>(Relatively) Limited Government </li></ul>
  24. 24. Types of Economic Systems <ul><li>We’ve looked to the answers to three questions when determining the type of market system at hand: </li></ul><ul><ul><ul><li>1. </li></ul></ul></ul><ul><ul><ul><li>2. </li></ul></ul></ul><ul><ul><ul><li>3. </li></ul></ul></ul><ul><li>To determine the type of Economic System, we will look to the answer to one final question: Who controls the means of production? </li></ul>
  25. 25. Types of Economic Systems Which countries are associated with these “decision makers”? Who controls the means of production? (Who are the decision makers?)
  26. 26. Types of Economic Systems Type of Economy Who controls the means of production? (Who are the decision makers?)