world economies social studies/economics robert louis martinez
TRANSCRIPT
Descriptive Overview: In this lesson, students will be exposed to four
types of world economies. They will also learn the historical background that led to the formation of those economies, specifically command and mixed
economies.
Lesson Objectives/Goals Describe and compare the economic systems
predominate in the world today. Compare and contrast traditional,
command and market economies. Explain how mixed economies are a
combination of other economic systems.
Adam Smith(1723-1790) Smith is considered the father of
capitalism and the free market theory.
Smith believed that market production and prices were controlled by consumers (the Invisible Hand). Prices and production would increase or decrease
depending on consumer demand. He believed that the government should not interfere with the economic
market.
Laissez-Faire Economics
Based on the economic theory that government should not interfere in business and the economy. (hands-off.) Little or no regulation, restriction, or taxes.
Capitalism
Based on the private ownership of property and the exchange for profit of goods, labor, and money.
Socialism A theory of social and economic
organization based on the government control (sometimes ownership) of the
factors of production and social services.
Karl Marx Regarded as the father of
communism and socialism. He believed that capitalism would
suppress the common peoples by placing the resources and wealth of production in the hands of the elite.
Marx proposed a ‘classless’ society, whereby all shared property and the factors of production were shared with no private property or ownership of industry.
Traditional Economies Traditional economies are found in rural, non-
developed countries Some parts of Asia, Africa, South America and
the Middle East have traditional economies Customs govern the economic decisions that
are made Technology is not used in traditional
economies.
Traditional Economies Farming, hunting and gathering are done the
same way as the generation before Economic activities are usually centered toward
the family or ethnic unit. Men and Women are given different economic
roles and tasks. Subsistence Level economics and production.
Command Economies The government or other central authority
makes decisions and determines how resources will be used .
Change can occur relatively easily. There is little individual freedom. There is no competition. Businesses are not run to create a profit.
Command Economies
Consumers have few chooses in the market place.
Factories are concerned with quotas. Shortages are common because of poorly run
factories and farms. The government dictates the job in which you
work.
Command Economies
The government sets the prices of goods and services.
Examples of command economies: Cuba, North Korea and the People’s Republic of China.
Market Economies Resources are owned and controlled by
individuals. Economic decisions are made by individuals
competing to earn profits. Individual freedom is considered very
important. Economic decisions are made by the basic
principals of supply and demand. Profit is the motive for increasing work rather
than quotas.
Market Economies Also called capitalist economies.
There are many economic freedoms.
There is competition among businesses.
Competition determines price which increase the quality of the product.
Mixed Economies Government and individuals share the decision
making process. Government guides and regulates production
of goods and services offered. Individuals own means of production. Protects consumers and workers from unfair
policies. Most effective economy for providing goods
and services.