Economic Systems
Mixed Economies
Introduction
List 3 examples of ways in which the US Gov’t. provides G’s & S’s & 3 examples of how the Gov’t. regulates how G’s & S’s are provided.
What do you think would happen if highways were provided by private firms who tried to charge people for using them?
Mixed Economy
Market-based economic system in which the Gov’t. is involved, to “some” extent.
Gov’t Involvement in Mixed Economies
Why Need Gov’t Involvement?
1. Some N’s/W’s → can’t be met in market.
2. Ensure all members of society benefit.
3. Protect Property Rights - 5th/14th Amends.
4. Ensure ex∆’s in marketplace → fair.
“Takings Clause”
“..nor shall any State deprive any person of life, liberty, or property, without due process of law”
Circular Flow Models of the Free Market
Circular Flow Model of a Mixed Economy
Circular Flow Model of a Mixed Economy
Circular Flow Model Example
A. Olivia chooses a sweater for her grandmother’s Christmas Present.
B. Sona Corporation pays $5k in income taxes to the state of Ohio.
C. 3Squares Co. produces MRE’s (meals-ready-to-eat) for US Army.
D. General Motors produces SUV’s for sale to consumers.
E. A Pentagon worker receives $60k/year for her work as a translator.
F. Jorge receives income from rental properties.
G. Exsalonce Beauty Parlor hires another hairdresser.
H. A recent police academy grad gets a job with the municipal police dept.
Circular Flow Model Example
J. The Cleveland Browns receive money from season tickets.
K. Irene receives $400/mo. from the gov’t b/c she has low income.
L. Mr. Kestner pays $100 for tickets to a Dwight Yoakam concert.
M. Abs-of-Steel Fitness Center pays its personal trainers each Friday.
N. A homeowner’s city gov’t provides curbside garbage pickup.
P. Henry paints houses as a summer job.
Case Study: Head-to-Head Battle
Read the case study & complete the Applying Economic Principles question in your notebook.
Who are the different parties involved in this debate?
Helmet manufacturers, doctors, local gov’t., lobbyists (pro & anti-helmet), insurance companies.
Case Study: Head-to-Head Battle
Applying Economic Principles:
How does the debate over helmet laws represent a conflict between different goals? Which goal do you think should be given a higher priority?
Why has the gov’t created laws requiring motorcyclists to wear helmets?
Why should non-motorcyclists care about helmet laws?
Mixed Economy - Pros:
1. Gov’t Regulation = Consumer Protection
2. Property Rights, Patents, Copyrights, etc.
9,304
2,774
Mixed Economy - Pros: (Cont.)
3. Taxes
“social benefits”
“Safety Net”
welfare programs
Mixed Economy - Cons:
1. ↑ Regulation Inhibits Growth.
2. Encourages Social Dependency on Gov’t Programs.
3. When, Where, & What Extent Should Gov’t Step In?
Welfare, Food Stamps, Section 8 Housing, etc.
Extension
Write a paragraph expressing your opinion about whether the US Gov’t. is involved enough or too much in the economy. Make sure to provide 2 examples to support your opinion.
Circular Flow Model Example
Form a partnership or a group. Choose a business & create a circular flow model within a mixed economy on the sheet of paper provided.
Analyzing An Economic Cartoon - Economic Transition
Answer the following questions while looking at the political cartoon:
1. What do the symbols in the cartoon represent?
2. What is the overall main idea of the cartoon? To what real world events do you think the cartoonist is referring?
3. Based on your reading of the chapter, what examples can you cite of steps China is taking towards a mixed economy?