Bellwork: Just answer in notesBellwork: Just answer in notes What kind of government

is this? How do you know?

Chapter 4-3 NotesChapter 4-3 Notes Economy = the system that includes all of the activities

(jobs) that people do to earn a living Hear “economy” – think “businesses” “The economy is doing well.” – Basically means that

businesses are doing well. “The economy is doing poor.” – Basically means that

businesses are doing poor and people are losing their jobs.

There are 3 types of economies….(page 94)

3 stories3 stories

The story of Whispering WindThe story of Whispering Wind

Whispering Wind was young man known for his craft. The whole village would brag to his father, Sitting Bull, about how comfortable and appealing his deerskin blankets were.

Many people from neighboring tribes would barter valuable goods for these deerskin blankets.

The story of Whispering WindThe story of Whispering Wind Whispering Wind would love it when winter came. People would wait outside his teepee with their finest

homemade goods, such as moccasins (like shoes), headdresses, meat and vegetables of all kinds.

Whispering Wind really didn’t need much of that though because his family had their own garden and hunted much of their own food.

The story of Whispering WindThe story of Whispering Wind

Often he would trade his deerskin blankets for things his family did not produce, but other people in the tribe did; such as moccasins, tools like arrows and spears, and even luxury items like headdresses.

All of Whispering Winds village makes their own goods and they barter with each other for goods that they don’t produce.

The story of Whispering WindThe story of Whispering Wind

1. What does barter mean?1. Barter means “to trade”

2. What do you think you know about Whispering Wind?

3. What do we call this kind of economy?1. A traditional economy is where people make

their own goods and trade for what they cannot produce.

The story of Bud.The story of Bud.

The story of BudThe story of Bud

Bud is very well known across his town. Many people come to his mechanic/tire shop, known as Bud’s Tire.

He is very friendly, only hires well trained and friendly people, and pays them well.

People often come to Bud’s Tire to get their cars and trucks fixed.

The story of BudThe story of Bud Then one day, another store known as Steve’s

Tire opened up down the street with lower prices.

Now many of Bud’s former customers were going to Steve’s Tire to get their cars and trucks fixed.

Bud thought…..and thought….and thought…and realized just what to do!

The story of BudThe story of Bud Bud lowered his prices and advertised them on big

signs in front of his store! Bud got his customers back because they were

attracted to his lower prices! These stores battled over prices back and forth until

both stores were barely making a profit. This bothered Bud, because he had to cut his

employees salaries; meaning that he had to pay them less money.

The story of BudThe story of Bud Then Bud got another idea! He would hire mechanics to fix tractors! There were very few tractor mechanics and a lot of farmers

around the outside of town. Since there was a high demand for tractor mechanics, Bud

could charge more money for his services. Bud put up big signs again advertising that he was the only

tractor mechanic for 20 miles. (which was true) People brought their tractors to Bud.

It was expensive to get the tractor fixed, but people paid it because there was no competition.

The story of BudThe story of Bud

1. How did Bud determine his prices?2. Why did people go to Steve’s Tire?3. How is business competition good for consumers? 4. What do we call this type of economy?

1. A market economy is a system where private citizens own businesses and make all business decisions.

2. This is also called capitalism and free enterprise.

The story of Mr. KimThe story of Mr. Kim

The story of Mr. KimThe story of Mr. Kim Mr. Kim works for the government. Most everybody that Mr. Kim knows also works for the

government. Mr. Kim works on a government-owned farm and is

under a lot of pressure to make sure the crops grow. The government tells Mr. Kim what to grow and where

to send his crops when they are harvested. He doesn’t sell them to the highest bidder, because the

government owns all the farms and businesses.

The story of Mr. KimThe story of Mr. Kim Mr. Kim’s friends work in many other industries, but they

are all owned by the government. His friend, Sou, who works in a store does not get to set

prices or determine what is sold. The store is also owned by the government.

No one in Mr. Kim’s country owns cars except top government officials.

Mr. Kim, Sou, and most everyone else they know ride the bus or subway everywhere.

Only top officials are allowed to own cars.

The story of Mr. KimThe story of Mr. Kim

1. How is this government system different than the other two?

2. What do we call this economic system?1. A command economy is a economy where the

government owns all businesses and makes all business decisions.

2. Very similar to Communism. Read page 684-685

Read and outline page 94 “Economic Systems”Read and outline page 94 “Economic Systems”

Economic SystemsEconomic SystemsII. Economic Systems

A. Traditional Economy1. People grow own food/make own goods2. Trade (barter) takes place (Barter = trade w/o money)3. Example = Native Americans

B. Market Economy1. Individuals own their own businesses2. Also called Capitalism and Free Enterprise3. United States is an example

C. Command Economy1. government makes all business decisions2. Ex. North Korea and Cuba3. Most Communist nations have a Command Economy (read 684-685)

Economic IndustriesEconomic Industries

The k-nowlege continues….

Put these into categoriesPut these into categories Teacher Lawyer Doctor Farmer Fisherman Nissan plant worker Hershey plant worker

Coal miner Police officer

What number comes to mind when you read these words?

What number comes to mind when you read these words?

Primary? Secondary? Tertiary? (Ternary = arranged in threes, or having a base of three) (tercentenary = a 300th anniversary) Quaternary? (Quatrain = A stanza or poem of 4 lines) (quadrennial = happening once in 4 years) (Quadriceps = the large 4 part extensor muscle on the front of

the thigh)

Types of economic activities (jobs)Types of economic activities (jobs)

I. Economic ActivityA. Primary Industry

1. Uses natural resources, or raw materials2. Provide raw materials to others.3. Ex. Farming, fishing, mining

B. Secondary Industry1. Use raw materials or nat’l resources to manufacture new products2. Ex. Furniture makers, automobile manufacturers, etc.

I. Economic Activity (cont.)I. Economic Activity (cont.)

C. Tertiary Industry1. Goods and services are exchanged2. People who work to sell goods: grocery store workers,

car salesmen, etc..3. People who perform services: mechanics, teachers,

doctors, bankers

D. Quaternary Industry1. People who work with information rather than goods2. Examples include scientists, architects, lawyers