ECONOMICS STANDARD THREE: Students will understand different types of economic systems and how they change [Economic Systems].
Students will understand that:
- Because resources are scarce, societies must organize the production, distribution, and allocation of goods and services.
- The way societies make economic decisions depends on cultural values, availability and quality of resources, and the extent and use of technology.
- Changing economic systems impact standards of living.
Different economic systems -- traditional, command, market, and mixed market -- have evolved over time. Each of these systems has costs and benefits for its citizens. Students will be more empowered when they comprehend how interdependent the world has become and what their role in the economy is.
Underlying the choices and decisions for every economy are the goals of efficiency, equity, freedom, growth, security, and stability. Understanding how a society uses its limited resources to achieve these goals involves understanding that trade-offs have to be made. For example, in the United States, political debates about universal health care, social security, and environmental issues revolve around how people value the economic goals. Economic analysis of these issues examines benefits received and costs incurred. Economists utilize dollars and cents to quantify trade-offs related to the use of productive resources. However, some goals, such as freedom and equity, are not easily quantified, yet have to be considered when making these decisions. Therefore, elected representatives choose based on what they or their constituencies value.