Last week we discussed the economy: the production, distribution and consumption of goods and services.
Early this week we'll be discussing how that happens. I teach that there are 4 basic economic systems: command, market, mixed, and traditional.
A command economy is controlled by the government. Maybe they force people to produce specific goods - or severely limit what people may buy. If you're familiar with The Hunger Games, you know what I'm talking about. The Capitol forced District 12 to produce coal. District 12 didn't have a choice. Command economy.
A market economy is based on supply and demand. (Demand being something people want or need... this always confused me as a kid...) In a market economy, if someone thinks they can make money selling something, then they should sell it. Again, from The Hunger Games, Peeta's dad was a baker. He wasn't forced to bake bread, but he thought he could make ends meet by doing so.
A traditional economy is based on need and, well... tradition. When Katniss went hunting in... yeah... The Hunger Games... she didn't know what she would bag. If she shot 3 squirrels and a rabbit, that's what she traded. The hunting skills were passed down from her father. There is still an aspect of supply and demand, but it's based on availability and necessity rather than profit. And generally, the skills are passed down by tradition.
In all actuality, the only true economic system is a mix of these three. And it's uninspired name is a "mixed economy."
We looked at the different types of economic systems today using beans. In one scenario the government highly regulated what students could produce. In a second scenario, there were no limits, profit was the only motivator. (And it proved to be a big motivator.) The third was a mix of the previous two.
If you want extra credit for reading and discussing the blog with an adult, write a sentence about your discussion. Include which method of putting the beans in the cup worked out best and why. Have the adult sign the paper. Make sure your name, date, and hour are on it and turn it in tomorrow.