Transcript Economics

Economics HG 28
EQ: How do people get the things they want and need?
Wants and Needs
All human beings have wants and
needs.
How do you get the things you
want and the things you need?
Resources are the supplies that
are used to meet our wants and
needs.
• Natural Resources are provided
by the planet. water, trees,
animals, oil, air, etc.
• Human Resources are provided
by people. Labor, skills, talents,
etc.
Countries require resources to
meet their needs.
Supply – How much you
Demand – How many people
have. Supply is limited.
want it. Demand is unlimited.
This pitcher of lemonade
has 12 glasses.
What do we do now?
If the people of all nations have unlimited wants
but face limited resources, what must happen? HG
29
Jot Thoughts, all Write Round Robbin . . .
Energy HG30
The power to do work.
Energy resources are the supplies
that provide the power to do
work.
Energy resources can be
renewable or nonrenewable.
• Renewable Resources – a
resource that can be totally
replaced or regenerated.
Water, Trees, Wind Energy, Sun
Energy
• Nonrenewable Resources –
cannot be replaced once
consumed, they are gone.
Fossil Fuels – they formed millions
of years ago. Oil, Natural Gas,
Coal.
Do we continue to use nonrenewable resources?
If so, at what rate should we be using them?
Should we switch to renewable resources? HG 31
Compare/Contrast Venn Diagram
Create a venn diagram comparing and contrasting renewable resources
to nonrenewable resources.
Economic Systems HG32
What types of economic systems
are used in our world today?
Economic Resources: goods and
services a society provides and
how they are produced,
distributed, and used.
Economic System: how a society
decides on the ownership and
distribution of its economic
resources.
They ask three basic questions:
• What should be produced?
• How should it be produced?
• How should the product be
distributed?
Scarcity
Choices
What to
Produce
How to Produce
For Whom to
Produce
Socialism HG33
In a socialist society, the society controls all aspects of the economy
through the government.
The government, rather than private owners, make business plans.
The government decides:
• What items will be produced.
• What jobs workers will have.
Socialists plan for a nation’s wealth to be more evenly divided among
its citizens, but this often doesn’t happen in reality.
Communism HG 34
Communism is a more extreme form of socialism.
In an ideal communist society, communism calls for a society in which
all are equal and no government is needed.
In reality, one political group, namely the communist party, controls the
government, society, and the economy.
Communism is a command economy. The means of production are
publically owned, and production and distribution are controlled by a
central governing unit.
Free Trade HG 35
A healthy free enterprise system is based on ethics, or moral principals of
right and wrong, that support individual liberty and economic freedom.
• Individuals/groups decide what to produce
• Shoppers decide what to buy
• Businesses produce and stock what they think shoppers will want
• Individuals/groups own property or businesses
• Profits made with only limited regulation by the government.
Benefits of this form of economy:
• People are free to choose their jobs.
• People can make and spend money as they see fit.
• Businesses provide a wide range of goods and services for consumers.
Mixed Economies HG36
A government supports and regulates free enterprise through decisions
that affect the overall economy.
Most world economies are mixed in some way.
Parts of the Economy
• Land – a factor in production
and natural resources
• Labor – all paid workers within a
system
• Capital – the human made
resources used to produce other
goods.
• Entrepreneurs – the people who
bring together natural resources,
labor, and capital to create a
business.
• Industry – a branch of business.
For example:
Agriculture – grows crops and
raises animals.
Manufacturing – uses technology
to produce a variety of finished
products.
Service – provides services rather
than goods. Banking and
restaurants.
Wholesale and Retail
HG37
Few goods are sold directly to
consumers. Whole sale and retail
business usually distribute goods.
• Wholesalers – generally buy
large quantities of products from
manufacturers and sell them to
retail stores.
• Retail Stores – sells items
directly to the consumers.
Wholesalers
Retail Stores
Types of Economic Activities
HG38
• Primary Sector – activities that
produce raw materials and basic
goods. Lumberjacks, farmers.
• Secondary Sector – make
finished goods. Construction
and automobile manufacturing
are examples.
• Tertiary Sector – Service
Industry. Sales and Healthcare
are examples.
Secondary
Sector
Economic Performance HG39
IS How well an economy meets
the needs of society. Several
factors are used to measure
economic success.
• Gross Domestic Product (GDP)
the total dollar value of all final
goods and services produced in
a country during a single year.
• GDP per Capita – the total
national output divided by the
number of people in a nation.
• Standard of Living – the level at
which a person, a group, or a
nation lives as measured by the
extent to which people’s needs
are met. These needs include
food, shelter, clothing,
education, and health care.
• Productivity – a measurement of
what is produced and what is
required to produce it.
Economic Performance 2
HG40
• Sustainable Growth – the growth
rate a business can maintain
without having to borrow
money.
• Employment Rate – the
percentage of the labor force
that is employed.
Types of National Economies
• Developed Countries – are
industrialized and have a strong
economy
• Developing Countries – are less
industrialized. The have weaker
economies where a part of the
economy live in poverty.
• Agricultural Countries – are
working to become more
advanced economically. Most of
their population lives in poverty.
They have weak economies.
• Newly Industrialized Countries
or NICs are in the process of
becoming developed and
economically secure.
EQ: How do the world’s economies interact
and affect one another? HG41
All nations of the world must find
a way to interact with one
another.
• Trade the business of buying,
selling, or bartering for goods
and services.
Countries have different
resources. Therefore, goods and
services can be produced in some
countries for far less than in
others.
Trade benefits countries:
Export – send to another country
Import – buys from another
country
• Tariff – a tax placed by a country
on anything that is imported.
Governments often create tariffs
to persuade their people to buy
products made in their own
country.
• HG 42 Quotas – a limit placed on
the amount of one particular
good that can be imported.
Quotas prevent countries from
exporting goods at much lower
prices than the domestic (local)
market can sell them for.
When little or no regulation is set
between countries, we call this
free trade.
The advantages and disadvantages
of trade.
Advantages – builds economic
growth and increases a countries
income.
Disadvantages – loss of jobs, and
increases in tariffs and taxes that
interfere with business.
Economic globalization takes place when businesses move past national
markets and begin to trade with other nations around the world.
Economic Organizations
HG43
• (WTO) World Trade
Organizations – helps regulate
trade among nations.
• World Bank – provides financing,
advice, and research to
developing nations to help them
grow their economies.
• (IMF) International Monetary
Fund – a group that monitors
economic development, lends
money to countries in need and
provides training and technical
support (help).
• (NAFTA) North American Free
Trade Agreement – encourages
trade between the US, Canada,
and Mexico.
Currency – Money HG 44
Whether a nation produces its
own goods or trades, one basic
principle is considered:
sustainability.
• Sustainability – creating
conditions where all the natural
resources for meeting the needs
of a society are available.