economics economics is the study of how individuals, businesses, and nations make things, buy...
TRANSCRIPT
![Page 1: Economics Economics is the study of how individuals, businesses, and nations make things, buy things, spend money and save money. TermDefinition Producer](https://reader035.vdocuments.mx/reader035/viewer/2022062509/5697bf871a28abf838c88fa1/html5/thumbnails/1.jpg)
Economics • Economics is the study of how individuals, businesses, and nations
make things, buy things, spend money and save money.
Term Definition
Producer A person or group that makes or provides a good or service.
Consumer
A person that buys or uses a good or service.
Goods
physical (tangible) objects that can satisfy people’s wants
Services
actions (intangibles) that one person performs for another to satisfy wants
Scarcity
Having “unlimited wants” (I want to drive across the United States) and “limited resources” (I only have $30 dollars for gas )
![Page 2: Economics Economics is the study of how individuals, businesses, and nations make things, buy things, spend money and save money. TermDefinition Producer](https://reader035.vdocuments.mx/reader035/viewer/2022062509/5697bf871a28abf838c88fa1/html5/thumbnails/2.jpg)
DO FIRST
• Using the vocabulary terms, read the 5 definitions and complete the nine practice problems by yourself to assess your understanding of the vocab terms.
![Page 3: Economics Economics is the study of how individuals, businesses, and nations make things, buy things, spend money and save money. TermDefinition Producer](https://reader035.vdocuments.mx/reader035/viewer/2022062509/5697bf871a28abf838c88fa1/html5/thumbnails/3.jpg)
Economics
Economic Question 1
Economic Question 2
Economic Question 3
What should be produced?
How should it be produced?
Who gets what is produced?
Economics is the study of how people meet their basic needs. All societies must answer 3 fundamental economic questions. How a society answers these three fundamental economic questions determines its type of economic system.
![Page 4: Economics Economics is the study of how individuals, businesses, and nations make things, buy things, spend money and save money. TermDefinition Producer](https://reader035.vdocuments.mx/reader035/viewer/2022062509/5697bf871a28abf838c88fa1/html5/thumbnails/4.jpg)
A Traditional Economy is…
• determined by custom and tradition. Generally people do what their ancestors did.
• Examples: – Bangladesh– Burma– Malawi
![Page 5: Economics Economics is the study of how individuals, businesses, and nations make things, buy things, spend money and save money. TermDefinition Producer](https://reader035.vdocuments.mx/reader035/viewer/2022062509/5697bf871a28abf838c88fa1/html5/thumbnails/5.jpg)
Economic Decisions
• Custom and Tradition determine what should be produced, how it should be produced and for whom.
![Page 6: Economics Economics is the study of how individuals, businesses, and nations make things, buy things, spend money and save money. TermDefinition Producer](https://reader035.vdocuments.mx/reader035/viewer/2022062509/5697bf871a28abf838c88fa1/html5/thumbnails/6.jpg)
Production
• The production of goods is based on custom and time-honored methods.
• New ideas are discouraged.• Change and growth proceed very slowly
![Page 7: Economics Economics is the study of how individuals, businesses, and nations make things, buy things, spend money and save money. TermDefinition Producer](https://reader035.vdocuments.mx/reader035/viewer/2022062509/5697bf871a28abf838c88fa1/html5/thumbnails/7.jpg)
Private Property
• Often there is no private property: things are owned by the family or village in common
![Page 8: Economics Economics is the study of how individuals, businesses, and nations make things, buy things, spend money and save money. TermDefinition Producer](https://reader035.vdocuments.mx/reader035/viewer/2022062509/5697bf871a28abf838c88fa1/html5/thumbnails/8.jpg)
Trade
• Goods and services are produced to meet the needs of the members of the family or tribe.
• Since they are produced and consumed locally, there is very little trade with outsiders.
![Page 9: Economics Economics is the study of how individuals, businesses, and nations make things, buy things, spend money and save money. TermDefinition Producer](https://reader035.vdocuments.mx/reader035/viewer/2022062509/5697bf871a28abf838c88fa1/html5/thumbnails/9.jpg)
2 Important Vocab Words
• Subsistence Agriculture – land produces only enough crops to feed family or village.
• Cottage Industries - goods made in the home. They help traditional societies meet needs of their family and the village.
![Page 10: Economics Economics is the study of how individuals, businesses, and nations make things, buy things, spend money and save money. TermDefinition Producer](https://reader035.vdocuments.mx/reader035/viewer/2022062509/5697bf871a28abf838c88fa1/html5/thumbnails/10.jpg)
Traditional Economy
• Read the passage and complete the chart that answers the three questions.
![Page 11: Economics Economics is the study of how individuals, businesses, and nations make things, buy things, spend money and save money. TermDefinition Producer](https://reader035.vdocuments.mx/reader035/viewer/2022062509/5697bf871a28abf838c88fa1/html5/thumbnails/11.jpg)
• What to produce?– Production based on
custom and time-honored methods
Traditional Economy
![Page 12: Economics Economics is the study of how individuals, businesses, and nations make things, buy things, spend money and save money. TermDefinition Producer](https://reader035.vdocuments.mx/reader035/viewer/2022062509/5697bf871a28abf838c88fa1/html5/thumbnails/12.jpg)
Traditional Economy
• How is it produced?– Children will do what their parents did– Resources/tools are primitive (basic)– Major jobs are:• Hunting• Farming• Herding cattle
![Page 13: Economics Economics is the study of how individuals, businesses, and nations make things, buy things, spend money and save money. TermDefinition Producer](https://reader035.vdocuments.mx/reader035/viewer/2022062509/5697bf871a28abf838c88fa1/html5/thumbnails/13.jpg)
Traditional Economy
• Who gets it?– Only enough is produced to meet the needs of the
family or tribe– Everything is shared
![Page 14: Economics Economics is the study of how individuals, businesses, and nations make things, buy things, spend money and save money. TermDefinition Producer](https://reader035.vdocuments.mx/reader035/viewer/2022062509/5697bf871a28abf838c88fa1/html5/thumbnails/14.jpg)
A Free Enterprise is…
• Determined by interactions between buyers and sellers – AKA: Capitalism
• Examples:– They do not exist in the real world. Countries that are
close to having a Free Enterprise are:• The United States• Japan• Germany
![Page 15: Economics Economics is the study of how individuals, businesses, and nations make things, buy things, spend money and save money. TermDefinition Producer](https://reader035.vdocuments.mx/reader035/viewer/2022062509/5697bf871a28abf838c88fa1/html5/thumbnails/15.jpg)
Private Property
• People have a right to own private property (personal possessions, factories, farms, businesses) and to use this property as they see fit with limited governmental interference.
![Page 16: Economics Economics is the study of how individuals, businesses, and nations make things, buy things, spend money and save money. TermDefinition Producer](https://reader035.vdocuments.mx/reader035/viewer/2022062509/5697bf871a28abf838c88fa1/html5/thumbnails/16.jpg)
Free Enterprise
• People are free to take part in any business, buy any product, or sell any legal product.
• Businesses are also free to do anything they wish in order to attract customers (lower prices, advertise, etc.)
![Page 17: Economics Economics is the study of how individuals, businesses, and nations make things, buy things, spend money and save money. TermDefinition Producer](https://reader035.vdocuments.mx/reader035/viewer/2022062509/5697bf871a28abf838c88fa1/html5/thumbnails/17.jpg)
Profit Motive
• The ability to make profits is what drives people to risk their money in starting new businesses.
• Sellers want to make a profit
![Page 18: Economics Economics is the study of how individuals, businesses, and nations make things, buy things, spend money and save money. TermDefinition Producer](https://reader035.vdocuments.mx/reader035/viewer/2022062509/5697bf871a28abf838c88fa1/html5/thumbnails/18.jpg)
Supply and Demand
• The interaction of supply and demand determines prices in a free market economy.
• When demand is high, the price goes up. If the supply is high but demand is low, the price goes down.
![Page 19: Economics Economics is the study of how individuals, businesses, and nations make things, buy things, spend money and save money. TermDefinition Producer](https://reader035.vdocuments.mx/reader035/viewer/2022062509/5697bf871a28abf838c88fa1/html5/thumbnails/19.jpg)
Important Vocab Terms
• Commercial Agriculture: crop production is intended for distribution to wholesalers and retailers, such as supermarkets and grocery stores. This makes production cheaper.
• Commercial Industries: goods are manufactured in factories for sale throughout the country or overseas.
![Page 20: Economics Economics is the study of how individuals, businesses, and nations make things, buy things, spend money and save money. TermDefinition Producer](https://reader035.vdocuments.mx/reader035/viewer/2022062509/5697bf871a28abf838c88fa1/html5/thumbnails/20.jpg)
Free Enterprise Economy
• Read the passage and complete the chart that answers the three questions.
![Page 21: Economics Economics is the study of how individuals, businesses, and nations make things, buy things, spend money and save money. TermDefinition Producer](https://reader035.vdocuments.mx/reader035/viewer/2022062509/5697bf871a28abf838c88fa1/html5/thumbnails/21.jpg)
Free Enterprise
• What to produce?– People are free to produce what they want– Based on profit motive (people want to make
money)
![Page 22: Economics Economics is the study of how individuals, businesses, and nations make things, buy things, spend money and save money. TermDefinition Producer](https://reader035.vdocuments.mx/reader035/viewer/2022062509/5697bf871a28abf838c88fa1/html5/thumbnails/22.jpg)
Free Enterprise• How is it produced?– Commercial Industries
(goods are manufactured in factories, large scale)
– Commercial Agriculture (farmers grow food to feed many ppl and sell it for $$$)
– Commercial = large scale & $$$$$
![Page 23: Economics Economics is the study of how individuals, businesses, and nations make things, buy things, spend money and save money. TermDefinition Producer](https://reader035.vdocuments.mx/reader035/viewer/2022062509/5697bf871a28abf838c88fa1/html5/thumbnails/23.jpg)
Free Enterprise
• Who gets it?– You can buy anything you
can afford– Price is determined by
supply (how much) and demand (how badly ppl want it)• If demand is high = price goes
up• If supply is high but demand
is low = price goes down
![Page 24: Economics Economics is the study of how individuals, businesses, and nations make things, buy things, spend money and save money. TermDefinition Producer](https://reader035.vdocuments.mx/reader035/viewer/2022062509/5697bf871a28abf838c88fa1/html5/thumbnails/24.jpg)
Role of Government
• Limited gov’t interference• Gov’t acts as:– Umpire (makes sure business play fair)– Enforces common rules– Maintains monetary ($$) system
![Page 25: Economics Economics is the study of how individuals, businesses, and nations make things, buy things, spend money and save money. TermDefinition Producer](https://reader035.vdocuments.mx/reader035/viewer/2022062509/5697bf871a28abf838c88fa1/html5/thumbnails/25.jpg)
Guided Practice – Short Answer• Annotate the question• How does a Free Enterprise economy determine
what is produced, how is it produced, and who gets it? Contrast a free market economy with a traditional economy, specifically mentioning subsistence agriculture and commercial agriculture.
• Brainstorm with elbow partner• Write down notes in 1st set of lines
• Expectations:• Quiet voices
![Page 26: Economics Economics is the study of how individuals, businesses, and nations make things, buy things, spend money and save money. TermDefinition Producer](https://reader035.vdocuments.mx/reader035/viewer/2022062509/5697bf871a28abf838c88fa1/html5/thumbnails/26.jpg)
A Command (Communist) Economy is…
• Where all decisions made by the GOVERNMENT
• Examples:– Vietnam– Cuba– North Korea– China
![Page 27: Economics Economics is the study of how individuals, businesses, and nations make things, buy things, spend money and save money. TermDefinition Producer](https://reader035.vdocuments.mx/reader035/viewer/2022062509/5697bf871a28abf838c88fa1/html5/thumbnails/27.jpg)
Command = Communism
• Developed in 1800’s by Karl Marx• Good in theory, bad in practice– Equality for everyone
• What can go wrong with everyone working hard and sharing all resources equally?
![Page 28: Economics Economics is the study of how individuals, businesses, and nations make things, buy things, spend money and save money. TermDefinition Producer](https://reader035.vdocuments.mx/reader035/viewer/2022062509/5697bf871a28abf838c88fa1/html5/thumbnails/28.jpg)
Role of Government
• All major decisions on production, distribution and the use of resources are made by government planners
![Page 29: Economics Economics is the study of how individuals, businesses, and nations make things, buy things, spend money and save money. TermDefinition Producer](https://reader035.vdocuments.mx/reader035/viewer/2022062509/5697bf871a28abf838c88fa1/html5/thumbnails/29.jpg)
Private Property
• Private property ownership is abolished and replaced by national ownership of all land, factories, farms and major resources
![Page 30: Economics Economics is the study of how individuals, businesses, and nations make things, buy things, spend money and save money. TermDefinition Producer](https://reader035.vdocuments.mx/reader035/viewer/2022062509/5697bf871a28abf838c88fa1/html5/thumbnails/30.jpg)
Cooperation
• Communism is based on cooperation, in which all workers should labor together and share equally.
• The economy is supposed to be run for the benefit of all members.
![Page 31: Economics Economics is the study of how individuals, businesses, and nations make things, buy things, spend money and save money. TermDefinition Producer](https://reader035.vdocuments.mx/reader035/viewer/2022062509/5697bf871a28abf838c88fa1/html5/thumbnails/31.jpg)
Major Goal
• The goal is to achieve a classless society – equality among all workers.
![Page 32: Economics Economics is the study of how individuals, businesses, and nations make things, buy things, spend money and save money. TermDefinition Producer](https://reader035.vdocuments.mx/reader035/viewer/2022062509/5697bf871a28abf838c88fa1/html5/thumbnails/32.jpg)
Command Economy
• Read the passage and complete the chart that answers the three questions.
![Page 33: Economics Economics is the study of how individuals, businesses, and nations make things, buy things, spend money and save money. TermDefinition Producer](https://reader035.vdocuments.mx/reader035/viewer/2022062509/5697bf871a28abf838c88fa1/html5/thumbnails/33.jpg)
Command Economy
• What to produce?– Determined by the government– Government leaders develop “national plans” (5
year periods) that specify which goods a factory will make
![Page 34: Economics Economics is the study of how individuals, businesses, and nations make things, buy things, spend money and save money. TermDefinition Producer](https://reader035.vdocuments.mx/reader035/viewer/2022062509/5697bf871a28abf838c88fa1/html5/thumbnails/34.jpg)
Command Economy• How is it produced?– Government decides– Cooperation – all workers
labor together and share equally
– Large Scale Industry– Large Scale Agriculture
“Workers of the world, unite!” - From The Communist Manifesto
![Page 35: Economics Economics is the study of how individuals, businesses, and nations make things, buy things, spend money and save money. TermDefinition Producer](https://reader035.vdocuments.mx/reader035/viewer/2022062509/5697bf871a28abf838c88fa1/html5/thumbnails/35.jpg)
Command Economy
• Who decides who gets is?– Government determines who
gets it (equality is key)– Goal is to achieve a classless
society (equality for everyone)
– No private property, replaced by national ownership of everything
![Page 36: Economics Economics is the study of how individuals, businesses, and nations make things, buy things, spend money and save money. TermDefinition Producer](https://reader035.vdocuments.mx/reader035/viewer/2022062509/5697bf871a28abf838c88fa1/html5/thumbnails/36.jpg)
A Socialist (Mixed) Economy is…
• Where most important business is owned by the government
• Most countries have elements of both free enterprise and command, and are somewhere in the middle of the spectrum
• Examples:– Sweden– Norway
![Page 37: Economics Economics is the study of how individuals, businesses, and nations make things, buy things, spend money and save money. TermDefinition Producer](https://reader035.vdocuments.mx/reader035/viewer/2022062509/5697bf871a28abf838c88fa1/html5/thumbnails/37.jpg)
Role of Government
• Government should use its power to bring an end to poverty by taking control of the major resources of the nation (railroads, airlines, radio stations) and by providing public service.
![Page 38: Economics Economics is the study of how individuals, businesses, and nations make things, buy things, spend money and save money. TermDefinition Producer](https://reader035.vdocuments.mx/reader035/viewer/2022062509/5697bf871a28abf838c88fa1/html5/thumbnails/38.jpg)
Economic Decisions
• Many decisions about production, distribution and the use of resources are made by the government. Other decisions are made privately.
![Page 39: Economics Economics is the study of how individuals, businesses, and nations make things, buy things, spend money and save money. TermDefinition Producer](https://reader035.vdocuments.mx/reader035/viewer/2022062509/5697bf871a28abf838c88fa1/html5/thumbnails/39.jpg)
Private Property
• Major industries are owned by the government. Other property is held privately.
![Page 40: Economics Economics is the study of how individuals, businesses, and nations make things, buy things, spend money and save money. TermDefinition Producer](https://reader035.vdocuments.mx/reader035/viewer/2022062509/5697bf871a28abf838c88fa1/html5/thumbnails/40.jpg)
Major Goal
• Socialism seeks a fairer distribution of income among all members of society. People’s basic needs (health care, transportation, education, housing) are met for free or at very low cost.
![Page 41: Economics Economics is the study of how individuals, businesses, and nations make things, buy things, spend money and save money. TermDefinition Producer](https://reader035.vdocuments.mx/reader035/viewer/2022062509/5697bf871a28abf838c88fa1/html5/thumbnails/41.jpg)
Socialist Economy
• Read the passage and complete the chart that answers the three questions.
![Page 42: Economics Economics is the study of how individuals, businesses, and nations make things, buy things, spend money and save money. TermDefinition Producer](https://reader035.vdocuments.mx/reader035/viewer/2022062509/5697bf871a28abf838c88fa1/html5/thumbnails/42.jpg)
Socialist Economy
• What to produce?– Major industries (railroads, airlines, hospitals,
banks) owned by gov’t– Everything else owned by people (small
businesses/shops, etc…)
![Page 43: Economics Economics is the study of how individuals, businesses, and nations make things, buy things, spend money and save money. TermDefinition Producer](https://reader035.vdocuments.mx/reader035/viewer/2022062509/5697bf871a28abf838c88fa1/html5/thumbnails/43.jpg)
Socialist Economy
• How is it produced?– Gov’t decides on big industries– People decide everything else
![Page 44: Economics Economics is the study of how individuals, businesses, and nations make things, buy things, spend money and save money. TermDefinition Producer](https://reader035.vdocuments.mx/reader035/viewer/2022062509/5697bf871a28abf838c88fa1/html5/thumbnails/44.jpg)
Socialist Economy
• Who gets it?– Fair distribution of goods
and income– Gov’t goal is to end
poverty