WHAT WILL WE LEARN TODAY?
 Identify various economic systems
 We will gain understanding of the
advantages and disadvant...
CLASS STRUCTURE FOR THE LESSON
1 – Market
economies
2 – International
trade
1 - Assess the
benefits of market
and mixed
ma...
MIXED MARKET AND MARKET ECONOMIES
WHAT IS AN ECONOMIC SYSTEM?
 Market economic system
 Planned economic system
 Mixed economic system
MARKET ECONOMY
 Decisions regarding investment, production
and distribution are based on supply and
demand factors.
 Mar...
ADVANTAGES OF A FREE MARKET ECONOMY
 A variety of goods and services available
 Businesses respond quickly
 Businesses ...
DISADVANTAGES OF A FREE MARKET ECONOMY
 Businesses will only produce goods and services
that earn a high profit
 Busines...
PLANNED ECONOMY
 Decisions regarding production and investment
are planned by central government and is
normally centrali...
MIXED ECONOMY
THE MIXED ECONOMY
Somewhere in-between the 2 extremes
The government can:
 Provide services such as education
 Provide s...
PROBLEMS CREATED BY GOVERNMENT POLICY
 Disposable income is reduced due to taxation
 Increased costs to business of regu...
MY WEEK
Don’t worry Matt
I’ll sort the taxes
Oh Pat you are my
hero, I wish I was
more like you
THE TRUTH
INTERNATIONAL TRADE
CONSUMER CHOICE AND OPPORTUNITIES FOR GROWTH
 Consumer choice
 Increased competition
 Business growth
 Free trade (wor...
ADVANTAGES OF INTERNATIONAL TRADE
 Specialisation
 Consumers benefit from imported goods
otherwise not available to them...
DISADVANTAGES OF INTERNATIONAL TRADE
 Competition
 Movement to less well
developed economies
 Global demand may be domi...
BARRIERS TO FREE TRADE
 Tariffs
 Quotas
 Embargos
EMBARGOS
Sometimes called Boycotting i.e. To
boycott another country
ARGUMENTS FOR TRADE BARRIERS
 They help protect small businesses and new
industries
 They prevent dumping
 They prevent...
ARGUMENTS AGAINST TRADE BARRIERS
 They restrict consumer choice and opportunities
for new businesses and business growth
...
PROBLEMS ENTERING NEW MARKETS ABROAD
ENTERING OVERSEAS MARKETS
 There may be language barriers
 Different cultures, customs and tastes will need
to be unders...
OVERCOMING PROBLEMS ENTERING OVERSEAS MARKETS
 A business can use
local contacts
 A business can set up
assembly or sale...
SO WHAT WAS THE FRUIT?
 It symbolised market structures
 Free market, all apples grow ungoverned
and the biggest and qui...
MIXED MARKET AND MARKET ECONOMIES
WHAT DID WILL WE LEARN TODAY?
 Identify various economic systems
 Understanding of the advantages and
disadvantages of v...
BUSINESS ACTIVITY
1 – Market economies
2 – International trade
1 - Assess the benefits of
market and mixed
economies
2 – D...
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Economic systems and fruit

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Economic systems and fruit

  1. 1. WHAT WILL WE LEARN TODAY?  Identify various economic systems  We will gain understanding of the advantages and disadvantages of various systems  To be able to analyse reasons to trade internationally  Also try to work out what the various fruit represents?????
  2. 2. CLASS STRUCTURE FOR THE LESSON 1 – Market economies 2 – International trade 1 - Assess the benefits of market and mixed market economies 2 – Determine the pros and cons of conducting business internationally 3 – Analyse the factors that may make entering an international market difficult Plenary
  3. 3. MIXED MARKET AND MARKET ECONOMIES
  4. 4. WHAT IS AN ECONOMIC SYSTEM?  Market economic system  Planned economic system  Mixed economic system
  5. 5. MARKET ECONOMY  Decisions regarding investment, production and distribution are based on supply and demand factors.  Market economies can range from hypothetical free market to regulated markets and interventionist variants.  Most existing market economies include a degree of economic planning or government direction and are classified as mixed economies.  In the real world, market economies do not exist in pure form
  6. 6. ADVANTAGES OF A FREE MARKET ECONOMY  A variety of goods and services available  Businesses respond quickly  Businesses will innovate  There is no taxation
  7. 7. DISADVANTAGES OF A FREE MARKET ECONOMY  Businesses will only produce goods and services that earn a high profit  Businesses will only sell products to consumers who can afford to pay most for them  Resources will only be employed if it is profitable to do so (no NHS etc...)  Harmful goods may be produced if it is profitable to do so  Some producers and consumers may ignore the harmful effects of their decisions on others and the environment  Some firms may dominate the market supply of a particular product (monopolies)
  8. 8. PLANNED ECONOMY  Decisions regarding production and investment are planned by central government and is normally centralised.  The goal of central planning is to allow government to take advantage of shared information and make informed decisions regarding investment and the allocation of economic resources.  The extreme is when government plan all areas of the economy and this is called a controlled system economy
  9. 9. MIXED ECONOMY
  10. 10. THE MIXED ECONOMY Somewhere in-between the 2 extremes The government can:  Provide services such as education  Provide services such as street lighting  Employ people who would otherwise be unemployed  Provide financial help to important businesses  Introduce laws to protect the consumer and the environment  Regulate or break-up monopolies
  11. 11. PROBLEMS CREATED BY GOVERNMENT POLICY  Disposable income is reduced due to taxation  Increased costs to business of regulation  Public sector organisations are often inefficient
  12. 12. MY WEEK Don’t worry Matt I’ll sort the taxes Oh Pat you are my hero, I wish I was more like you
  13. 13. THE TRUTH
  14. 14. INTERNATIONAL TRADE
  15. 15. CONSUMER CHOICE AND OPPORTUNITIES FOR GROWTH  Consumer choice  Increased competition  Business growth  Free trade (workforces and technologies anywhere in the world)
  16. 16. ADVANTAGES OF INTERNATIONAL TRADE  Specialisation  Consumers benefit from imported goods otherwise not available to them  Competition  Economies of scale  Best workforces
  17. 17. DISADVANTAGES OF INTERNATIONAL TRADE  Competition  Movement to less well developed economies  Global demand may be dominated by certain developed/developing economies  Social cost of transport pollution  Loss of culture, uniqueness
  18. 18. BARRIERS TO FREE TRADE  Tariffs  Quotas  Embargos
  19. 19. EMBARGOS Sometimes called Boycotting i.e. To boycott another country
  20. 20. ARGUMENTS FOR TRADE BARRIERS  They help protect small businesses and new industries  They prevent dumping  They prevent over-specialisation by protecting a range of different industries
  21. 21. ARGUMENTS AGAINST TRADE BARRIERS  They restrict consumer choice and opportunities for new businesses and business growth  They protect inefficient domestic businesses with higher costs and often lower-quality products  Other countries will retaliate by introducing their own trade barriers
  22. 22. PROBLEMS ENTERING NEW MARKETS ABROAD
  23. 23. ENTERING OVERSEAS MARKETS  There may be language barriers  Different cultures, customs and tastes will need to be understood  The business must comply with different laws, regulations and taxes  The business must manage exchange rate risks  There are increased risks of non-payment
  24. 24. OVERCOMING PROBLEMS ENTERING OVERSEAS MARKETS  A business can use local contacts  A business can set up assembly or sales only business units overseas  It can enter into a joint venture with an overseas business  A business can merge with or takeover an existing business
  25. 25. SO WHAT WAS THE FRUIT?  It symbolised market structures  Free market, all apples grow ungoverned and the biggest and quickest fall first and succeed in planting their seed  Planned economy – government tell you what to grown and where it goes  Mixed economy – Somewhere in-between, plus its a cool image  World trade and choice
  26. 26. MIXED MARKET AND MARKET ECONOMIES
  27. 27. WHAT DID WILL WE LEARN TODAY?  Identify various economic systems  Understanding of the advantages and disadvantages of various systems  Reasons to trade internationally  Some gibberish about fruit
  28. 28. BUSINESS ACTIVITY 1 – Market economies 2 – International trade 1 - Assess the benefits of market and mixed economies 2 – Determine the pros and cons of conducting business internationally 3 – Analyse the factors that will make entering international market s difficult Plenary

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