Transcript December 15, 2014

WARM UP- DECEMBER 15, 2014
If the people of Cabbage Patch Town overthrow their king and create a new
government with universal suffrage for all citizens of Cabbage Patch Town,
which of the following statements about Cabbage Patch Town’s new
government is true?
a. Cabbage Patch Town has changed from being an autocratic nation to a
democratic nation.
b. Cabbage Patch Town has changed from being a democratic nation to an
autocratic nation.
c. Cabbage Patch Town will not change and will remain an oligarchic country.
d. Cabbage Patch Town will not change its leadership, but it will change its
legislature.
STANDARDS
SS7E6a. Explain how specialization
encourages trade between countries.
SS7E6b. Compare and contrast different
types of trade barriers, such as tariffs,
quotas, and embargos.
ESSENTIAL QUESTION
How does specialization
encourage trade between
countries in Southwest Asia?
ACTIVATOR
https://www.youtube.com/watch?v=WmAwcMNxGqM
I Love Lucy
Specialization and Trade
Specialization
“Do what you do best; trade for the rest!”
• Attempting to produce everything you
want to consume yourself limits both your
production and consumption possibilities.
• To specialize, you must figure out what
you “do best.” Economists define “best”
as that which you produce at the lowest
opportunity cost.
• “Trading for the rest” by “selling” the
goods or services you can produce at low
opportunity costs and then “buying”
things you would produce at a high
opportunity cost requires division of labor.
• Specialization and trading goods and
services with others can help everyone.
Specialization
• Specialization encourages trade
and can be a positive factor in a
country’s economy.
Specialization occurs when one
nation can produce a good or
service at a lower opportunity
cost than another nation.
• Sometimes, specialization has
not functioned as expected.
What are the potential problems
of over-specialization such as
one-crop economies and lack of
diversification? How can this
impact a region’s economy?
Barriers to Trade
• A tariff is a tax placed on goods that
one nation imports from another.
• Many nations use tariffs to protect
their industries from foreign
competition.
• Tariffs provide protection by acting
to raise the price of imported goods.
• Thus, tariffs encourage domestic
firms to increase their production,
and consumers are forced to pay
higher prices for the protected
goods.
Import quotas
• Import quotas offer another
means of protectionism.
• These quotas set a limit on the
amount of certain goods that
can be imported into a country
and tend to be more effective
than protective tariffs, which do
not always stop consumers
who are willing to pay a higher
price for an imported good.
Embargo
• An embargo is an order designed to stop the
movement of goods.
• An embargo, issued by the government of one
country, may restrict or suspend trade between
that country and another nation.
• A government may impose an embargo to hamper
the military efforts of another government.
• For example, the United States prohibits the
export of weapons to countries that sponsor
terrorism.
• Sometimes a government imposes an embargo to
express its disapproval of actions taken by
another government. The embargo is intended to
pressure the offending government to change its
actions.
How do Economies Grow?
Factors of Production
• There are four factors - land,
labor, capital, entrepreneurship
- that influence economic
growth.
• Capital is split into two
categories: human and
physical.
• Economic growth is usually
measured by calculating the
percent increase in GDP from
one year to the next. This is
known as the GDP Growth
Rate.
How do Economies Grow?
Resources that influence economic growth
•
Land provides the basic raw materials-vegetation, animals, minerals, fossil fuels--that
are inputs into the production of goods (natural
resources).
•
Labor is the resource that does the "hands on"
work of transforming raw materials into goods.
•
Capital is the comprehensive term for the vast
array of tools, equipment, buildings, and
vehicles used in production.
•
Entrepreneurship is the resource that
undertakes the risk of bringing the other
resources together and initiating the production
process.
•
LAND: This category sometimes extends over
all natural resources. It is intended to represent
the contribution to production of nonhuman
resources as found in their original, unimproved
form. A material source of wealth, such as
timber, fresh water, or a mineral deposit, that
occurs in a natural state and has economic
value
•
LABOR: human effort used in production which
also includes technical and marketing expertise
How do Economies Grow?
Resources that influence economic growth
•
CAPITAL RESOURCES: humanmade goods which are used in the
production of other goods. These
include machinery, tools, factories
and other buildings, and
technology.
•
HUMAN CAPITAL – education
and training of workers whether
formal or on-the-job
•
ENTREPRENEURSHIP:
Entrepreneurship is a special sort
of human effort that takes on the
risk of bringing labor, capital, and
land together and organizing
production. Entrepreneurs
combine the other factors of
production, land, labor, and capital
in an innovative way to make a
profit.
Investment and GDP
•
Investment in improving a nation's capital
resources and/or human capital results in
economic growth and improved GDP.
•
Failure to improve these types of capital, or
the inability to improve them results in no
growth of GDP.
•
Nations which have valuable minerals such
as diamonds, gold, uranium, and/or
petroleum can profit from the income that
the extraction and sale of these minerals,
which will increase the national GDP.
•
Sometimes this money is stolen by corrupt
leaders, but when the income is used to
improve the nation's infrastructure, the
citizens may benefit.
•
Highly developed economies like the USA
and Israel have smaller growth rates
because the size of these economies are
already so large.
CHECK FOR UNDERSTANDING
To check for understanding, complete the
Tariffs, Quotas & Embargos handout by
circling the correct term next to each
definition.
Then complete the Writing Task!
Closing