Transcript Economics - Tate County School District

Unit 2: Economics
What is Economics?
◦“A science that deals with the
allocation, or use, of scarce
resources for the purpose of
fulfilling society’s needs and
wants.” – Addison-Wesley
Economics:
Social Science concerned with the
way society chooses to employ its
limited resources which have
alternative uses to produce goods
and services for present and future
consumption
What is Economics?
 So
then the big two concepts
are that:
◦Resources are scarce!
◦Society has unlimited needs
and wants!
Economics decides the “best”
way of providing one to the other
Vocabulary:
Supply/Demand
Push/Pull
Business Cycle
Recession
Depression
Federal Budget
Capitalism
Centrally Planned
Scarcity
Natural Resources
Free Enterprise
Distribution
Supply/Demand
- as demand increases the price
goes up, which attracts new
suppliers who increase the supply
bringing the price back to normal.
- as supply increases, the price will
go down because demand will
decrease
Push/Pull:
When people migrate, they don't
just leave one place and magically
arrive somewhere else. Usually
something pushes them away from
their native country and pulls them
toward a new place. This idea is
called the push-pull factor.
Business Cycle:
A business cycle is basically defined in terms
of periods of expansion or recession.
During expansions, the economy is growing in real
terms as evidenced by increases in indicators like
employment, industrial production, sales and personal
incomes.
Recession - a period of temporary economic
decline during which trade and industrial
activity are reduced
Depression:
a long and severe recession in an
economy or market.
The Great Depression – 1929 –
1941
Federal Budget:
the ​amount of ​money that
is ​available for
a ​federal ​government to ​spend in
a particular ​year
Deficit – we owe money
Surplus – we have extra money
Capitalism:
an economic and political system
in which a country's trade and
industry are controlled by private
owners for profit, rather than by
the state.
Centrally Planned Economy:
An economic system in which economic
decisions are made by the state or government
rather than by the interaction between
consumers and businesses.
The state can set prices for goods and
determine how much is produced, and can focus
labor and resources on industries and projects
without having to wait for private investment
capital.
Free Enterprise:
an economic system in which
private business operates in
competition and largely free of
state control.
United States –
What type of economy
do we have?
We have a mixed economy…
public schools and colleges
tobacco regulation
alcohol regulation
farm subsidies
meat inspection
pharmaceutical regulations
health insurance laws
car insurance
Scarcity
the fundamental economic problem
of having seemingly unlimited
human wants in a world of limited
resources. It states that society has
insufficient productive resources to
fulfill all human wants and needs.
Natural Resources:
materials or substances such as
minerals, forests, water, and fertile
land that occur in nature and can
be used for economic gain.
Factors of Production
 There
are 4 factors that must all
be used to produce anything
◦Natural Resources (also
referred to as “land”)
Distribution:
the action or process of supplying
goods to stores and other
businesses that sell to
consumers
Factors of Production
 There
are 4 factors that must all
be used to produce anything
◦Labor – effort of a person for
which they are paid
Factors of Production
◦Capital – human-made
resources used to create other
goods
Factors of Production
Physical Capital – Also called
Capital Goods, objects that are
used to produce other goods
Factors of Production
Human Capital – knowledge or
skills workers get from
education and experience
Factors of Production
 There
are 4 factors that must all be
used to produce anything
◦ Entrepreneurship – person who
takes a risk in combining the other
3 factors to create a new good

1. Which of the following are factors of
production?
◦
◦
◦
◦
a.
b.
c.
d.
Capital and Land
Scarcity and shortages
Technology and productivity
economics and business decisions
QUIZ –
Number your paper 1 - 6

a. capital and land
Answer is …

2. Which of the following is an example
of using physical capital to save time and
money?
◦ a. hiring more workers to do a job?
◦ b. building extra space in a factory to simplify
production
◦ c. switching from oil to coal to make
production cheaper
◦ d. lowering workers’ wages to increase profits
Next question …

b. building extra space in a factory to
simplify production
Answer is …

3. To what part of an industry does a
worker’s education contribute?
◦
◦
◦
◦
a.
b.
c.
d.
technology
physical capital
human capital
scarce resources
next question …

c. human capital
Answer is …

4. Which of the following is an
entrepreneur?
◦ a. a person who earns a lot of money as a
singer or dancer
◦ b. a person who creates a game and sells it to
a game manufacturer
◦ c. a person who starts an all-organic cleaning
supplies business that employs others
◦ d. a person who works as a highly paid
computer programmer
next question …

c. a person who starts an all-organic
cleaning supplies business that employs
others
Answer is …

5. What is the difference between a
shortage and scarcity?
◦ a. A shortage can be temporary or long-term,
but scarcity always exists.
◦ b. A shortage results from rising prices;
scarcity results from falling prices.
◦ c. A shortage is a lack of all goods and
services; scarcity concerns a single item.
◦ d. There is no real difference between a
shortage and scarcity
Next …

a. A shortage can be temporary or longterm, but scarcity always exists!
answer …

6. What does an economist mean by the
term LAND?
◦ a. farmland only
◦ b. food crops grown on farmland as well as the
farmland itself
◦ c. goods and services that are produced form
the land
◦ d. all natural resources used to produce goods
and services
next….

d. all natural resources used to produce
goods and services!
answer …