Transcript production - Public Schools of Robeson County

Bell Starter
(Section 1)
Key Terms
Goods
Services
Factors of
production
Natural resources
Labor
Key Terms
Capital
Entrepreneur
Gross Domestic
Product (GDP)
Standard of living
ECONOMIC RESOURCES
PRODUCTION OUTPUT OF U.S. AT
BEGINNING OF 21ST CENTURY AT
10 TRILLION (30%) OF WORLD’S
OUTPUT
PRODUCTION
COMES IN THE FORM OF GOODS AND
SERVICES
GOOD:
BOOKS , CARS
SERVICES:
HAIRCUTS, HOME REPAIRS, CONCERTS
TO MAKE GOODS AND SERVICES YOU MUST
HAVE THE FOUR FACTORS OF PRODUCTION
FOUR FACTORS OF
PRODUCTION
NATURAL RESOURCES
COMES FROM NATURE
 FERTILE FIELDS, RAINFALL, FOREST, MINERAL DEPOSITS
 SCHOOLS—BUILT ON/WITH NATURAL RESOUCES
HUMAN RESOURCES (LABOR)
 PHSYCIAL AND MENTAL WORK
CAPITAL RESOURCES
CAPITAL GOODS:
 UNIQUE BECAUSE THEY GO INTO MAKING ANOTHER
PRODUCT AND ARE NOT COUNTED IN GDP
 TOOLS, MACHINERY
ENTREPRENEURAL SKILLS
NEW BUSINESSES, INTRODUCE NEW PRODUCTS
FACTORY OF PRODUCTION
ACTIVITY
Natural
Resources
Human
Resources
Capital Goods
Entrepreneur
Gift of Nature
Electricians
Machinery
New Model of Car
GDP
GROSS DOMESTIC PRODUCT
TOTAL DOLLAR VALUE OF ALL FINAL GOODS
AND SERVICES PRODUCED IN A COUNTRY EACH
YEAR
Loaf of bread—sold to its user
Goods that’s go into making-not counted
Sales of used goods—not counted
THIS IS HOW WE DETERMINE WHERE WE ARE
IN THE BUSINESS CYCLE
2 QUARTERS OF GDP GOING DOWN
2 QUARTERS OF GDP GOING UP
CALCULATING THE GDP
NUMBER OF ALL FINAL GOODS AND
SERVICES PRODUCED IN USA IN ONE
YEAR
NUMBER OF EACH THAT ARE
PRODUCED
LIST OF PRICES FOR EACH GOOD AND
SERVICE PRODUCED
CALCULATING THE GDP
GDP = QUANTITY X PRICE AVERAGE
OF EACH ITEM THEN ADD ALL
TOGETHER
5 CARS AT 25000 (5 X 25000) =
4 BOATS AT 30000 (4 X 30000) =
10 MOTORCYCYES AT 500 (10X500)=
COMPUTING GDP
Final Goods
And Services
Goods:
Automobiles
Books
Computers
----------------------Zippers
Services:
Advertising (minutes of)
Babysitting (hours of)
Car Washes (number of)
__________
Zodiac Readings (number of)
Gross Domestic Product:
Quantity
(in thousands)
Average
Price
Value
(in millions)
6,000
15,000
1,300
________
1,000
$28,000
25
1,700
_________
2
$168,000
375
2,210
_________
2
1,050,000
50,000
15,000
_________
400
$1,000
5
10
_______
10
$1,050,000
250
150
_________
4
$10.2 trillion
Bell Starter
(Section 2)
Factor Market
Product Market
Productivity
Specialization
Division of labor
Economic
interdependence
 Workers earn wages
 Factor or Product Market
 Banks earn interest
 Factor or Product Market
 Music stores sells CDs
 Factor or Product Market
 Landowners receive
rent
 Factor or Product Market
ECONOMIC ACTIVITY &
PRODUCTIVITY
CIRCULAR FLOW OF THE ECONOMY IS
HOW PRODUCTS FLOW FROM ONE
MARKET TO ANOTHER
CIRCULAR FLOW
MARKET ALLOWS BUYERS AND
SELLERS TO EXCHANGE ECONOMIC
PRODUCTS
LOCAL, REGIONAL, NATIONAL, GOLBAL
SECTOR ONE: THE CONSUMER
COSUMERS, BUSINESSES,
GOVERNMENT AND FOREIGN SECTOR
EARN INCOME IN FACTOR MARKET
(PLACE WHERE PRODUCTIVE
RESOURCES ARE BOUGHT & SOLD
WORKERS: EARN WAGES, SALERIES, & BENEFITS
LANDOWNERS: EARN RENT
CAPITAL INVESTORS EARN INTEREST
SECTOR TWO: THE BUSINESS
INDIVIDUALS RECEIVE THEIR
INCOMES FROM THE FACTOR
MARKET.
THEY WILL SPEND $ (INCOMES) IN THE
PRODUCT MARKETS. (WHERE
PRODUCERS OFFER GOODS &
SERVICES FOR SALE
BUSINESS PURCHASE SOME OF ITS OWN
OUTPUTS LIKE CAPITAL GOODS
(COMPUTER)
SECTOR THREE: GOVERNMENT
ALL LEVELS (LOCAL, STATE,
NATIONAL) PARTICIPATE IN MARKETS.
SALES OF SERVICES ARE GOVERNMENT
REVENUES BUT THEY ALWAYS NEED
MORE SO THEY DO OTHER THINGS
TAXATION
PUBLIC UNIVERSITIES: TUITION
CITY BUSES: FARES
GOVERNMENT
GOVERNMENT PURCHASES IN
PRODUCT MARKET TO BUY THINGS
LIKE:
PURCHASE OF BOOKS, BUSES, SHIPS, PLANES
GOVERNMENT PURCHASES IN FACTOR
MARKET TO BUY THINGS LIKE:
RECEIVES REVENUE FROM THE SERVICES
SOLD
PUBLIC UNIVERSITIES CHARGE TUTION
PUBLIC HOSPITALS CHARGES FEES
SECTOR FOUR: FOREIGN
SECTOR
ALL OTHER COUNTRIES IN THIS
WORLD
LINE WITH ARROW AT BOTH ENDS B/C
WE SELL AND BUY PRODUCTS FROM
OTHER COUNTRIES. OFFSETS EACH
OTHER
PRODUCTIVITY & ECONOMIC GROWTH
 PRODUCTIVITY
 MEASURE OF THE AMOUNT OF OUTPUT PRODUCED
BY A GIVEN AMOUNT OF INPUTS IN A SPECIFIC
PERIOD OF TIME
LABOR TERMS: BUT APPLIES TO ALL FACTORS
OF PRODUCTION
HELPS TO SPECIALIZE: WHICH LEAD TO
FOREIGN TRADE
WHY NATIONS TRADE?
1. SPECIALIZATION
GOODS AND SERVICES YOU CAN PRODUCE
BETTER THAN ANYONE ELSE
 2. COMPARATIVE ADVANTAGES
HIGHER WAGES, BETTER JOBS
 3. TRADE CREATES JOBS AND MARKETS
DIVISION OF LABOR
 4. ECONOMIC INTERDEPENDENCE
WE RELY ON EACH OTHER FOR GOODS
AND SERVICE
BELL STARTER
(Section 3)
CAPITALISM
FREE ENTERPRISE
COMSUMER SOVEREIGNTY
PRIVATE PROPERTY RIGHTS
COMPETITION
PROFIT
PROFIT MOTIVE
VOLUNTARY EXCHANGE
CAPITALISM & FREE ENTERPRISE
MARKET
ECONOMY
CAPITALISM
ECONOMIC SYSTEM IN WHICH
PRIVATE CITIZENS OWN AND USE
FACTORS OF PRODUCTION FOR THEIR
OWN PROFIT
FREE ENTERPRISE
COMPETITION IS ALLOWED TO
FLOURISH WITH A MINIMUM OF
GOVERNMENT INTERFERENCE
FEATURES OF CAPITALISM
MARKET
IMPORTANT PART OF OUR ECONOMIC
SYSTEM
LOCAL, STATE, NATIONAL, GLOBAL
CONNECT CONSUMERS & BUSINESS IN
FACTOR & PRODUCT
CONSUMER MOST IMPORTANT
CONSUMER SOVEREIGNTY
Consumers as king or ruler of the market
FEATURES OF CAPITALISM
ECONOMIC FREEDOM
CHOOSE TYPE OF JOB
CHOOSE WHEN & WHERE WE WANT TO
WORK AND FOR HOW MUCH
CHOOSE PRODUCTS WE BUY
BUSINESS CHOOSE THE PRODUCTS THEY
PRODUCE OR SALE
FEATURES OF CAPITALISM
PRIVATE PROPERTY RIGHTS
TAKE BETTER CARE OF ITEMS YOU OWN
AS OPPOSE TO RENTING
FREEDOM TO DISPOSE OF IT
INCENTIVE TO WORK, SAVE, AND INVEST
FEATURES OF CAPITALISM
COMPETITION
CAPITALISM THRIVES ON THIS
INVISABLE HAND (ADAM SMITH) DRIVES
PRICES DOWN
REWARDS MOST EFFICIENT PRODUCERS
& FORCES OTHERS OUT OF BUSINESS
FEATURES OF CAPITALISM
THE PROFIT MOTIVE
FREE TO RISK EVERYTHING IN BUSINESS
VENTURE
GOES WELL-PROFIT
GOES BADLY - BANKRUPT (REPO)
PROFIT: AMOUNT LEFT OVER AFTER ALL
COST OF PRODUCTION HAVE BEEN PAID
FEATURES OF CAPITALISM
VOLUNTARY EXCHANGE
YOU AND THE SELLER-GIVE AND TAKE
BOTH PARTIES FEEL THAT THEY WILL
BENEFIT
SPREAD OF CAPITALISM
NO ONE PERSON INVENTED
SPECIALIZATION
COMPARATIVE ADVANTAGE
ADAM SMITH
WEALTH OF NATIONS 1776
LAISSAZ-FAIRE ECONOMICS
HANDS OFF - NO GOVERMENT REGULATIONS
OR INTERFERANCE
INDIVIDUALS SEEKING TO MAKE A
PROFIT BENEFIT ALL OF SOCIETY
INVISABLE HAND
COMPETITION