Scribd Logo
Upload

Welcome to Scribd!

  • 4 views

    116-free-mixed-command-economy_2

    Uploaded by

    DUO ASSASSIN

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    116-free-mixed-command-economy_2

    Uploaded by

    DUO ASSASSIN
    4 views8 pages

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    4 views8 pages

    116-free-mixed-command-economy_2

    Uploaded by

    DUO ASSASSIN

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    You are on page 1of 8

    1.1.

    6 Free market economies,


    mixed market economies and
    command economies.
    Theme 1: Introduction to markets and market failure
    DO NOW

    1. What are the three basic economic questions?


    2. What is meant by rationing?
    3. Distinguish between a free market economy and a planned
    economy.
    4. What is a mixed economy?
    5. What are the characteristics of a free market economy?
    6. What are the advantages and disadvantages of a free market
    economy?
    7. What is meant by the term “the invisible hand”?
    Lesson Outcomes
    • Explain the distinction between free market, mixed and command
    economies with reference to Adam Smith, Friedrich Hayek and Karl Marx

    • Discuss the advantages and disadvantages of a free market economy and


    a command economy

    • Explain the role of the state in a mixed economy

    Theme 1: Introduction to markets and market failure


    1.1 Nature of economics
    1.1.6 Free market economies, mixed market economies and command economies
    The Specification
    1.1 Nature of economics

    Theme 1: Introduction to markets and market failure


    1.1.6 Economic Systems
    Economic Systems Free Market Mixed Market Command Economy
    Economy
    Definition

    Key Thinkers

    Characteristics

    Advantages

    Disadvantages

    Real-world examples
    that lean towards
    this system
    1.1.6 Economic Systems (Q2- Q4)
    Economic Free Market Economy Mixed Market Economy Command (planned) Economy
    Systems
    Definition Where all resources are privately owned and Where some resources are Where there is public (state)
    allocated via the price mechanism. There owned and allocated by the ownership of resources and
    minimal government intervention. private sector and some by the these are allocated by the
    public (state) sector. government.
    Key Thinkers Adam Smith John Maynard Keynes Karl Marx - believed that
    • invisible hand, self regulating market Government intervention to labour was exploited by
    place, individuals seeking to maximise their avoid the disadvantages of a capitalism
    self-interest results in an efficient market economy and help
    allocation of resources and benefits markets work more effectively Communism
    society as a whole Community of people
    Fredrick Von Hayek (government) own the means of
    Fredrick Von Hayek Acknowledge that the state production.
    • Decentralisation and decision making best played a role as maintaining law No need to exploit labour as
    left in the hands of individuals and groups and order and as a safety net. workers share output
    of individuals e.g. businesses e.g. National Health Service to distributed centrally
    • Too much government intervention made support workers in times of
    distorted the smooth running of the free need e.g. unemployment
    market mechanism
    • Against collectivism because it can lead to
    totalitarianism
    Characteristics - Private sector ownership Enterprise is actively Rationing and planning take
    - Free enterprise i.e. demand and supply is encouraged but there is place
    determined by the market mechanism government intervention
    - Limited government intervention
    - Ccompetition
    Task – 2 mins
    1.1.6 Free market, mixed market and command economies (2)

    Look at each statement and decided if it relates to a free market


    economy or a command economy and whether it is an advantage
    or disadvantage.
    1.1.6 Economic Systems
    Economic Systems Free Market Economy Mixed Market Economy Command (planned) Economy
    Definition Where all resources are privately owned and allocated via Where some resources are owned and Where there is public (state) ownership
    the price mechanism. There minimal government allocated by the private sector and some of resources and these are allocated by
    intervention. by the public (state) sector. the government.
    Key Thinkers Adam Smith John Maynard Keynes Karl Marx - believed that labour was
    • invisible hand, self regulating market place, individuals Government intervention to avoid the exploited by capitalism
    seeking to maximise their self-interest results in an disadvantages of a market economy and
    efficient allocation of resources and benefits society as help markets work more effectively Communism
    a whole Community of people (government) own
    Fredrick Von Hayek the means of production.
    Fredrick Von Hayek Acknowledge that the state played a role No need to exploit labour as workers
    • Decentralisation and decision making best left in the as maintaining law and order and as a share output distributed centrally
    hands of individuals and groups of individuals e.g. safety net. e.g. National Health Service
    businesses to support workers in times of need e.g.
    • Too much government intervention made distorted the unemployment
    smooth running of the free market mechanism
    • Against collectivism because it can lead to totalitarianism
    Characteristics - Private sector ownership Enterprise is actively encouraged but Rationing and planning take place
    - Free enterprise i.e. demand and supply is determined by there is government intervention
    the market mechanism
    - Limited government intervention
    - Ccompetition
    Advantages See worksheet answers Benefits of free market enterprise. See worksheet answers
    1.1.6 Free market, mixed market and command economies (2) Government intervention to reduce 1.1.6 Free market, mixed market and
    negative externalities, provide public command economies (2)
    goods, control demerit goods
    and supply merit goods
    Disadvantages See worksheet answers Government intervention could generate See worksheet answers
    1.1.6 Free market, mixed market and command economies (2) economic distortions or even a worse 1.1.6 Free market, mixed market and
    situation than if markets were left to command economies (2)
    themselves (Government failure)
    Real-world examples Japan UK, France, Germany North Korea
    that lean towards
    this system
    Research real-world examples for homework this week

    You might also like