Transcript pirate economics

Pirate Economics
Role of Markets
SS.11.8.3 - Describe how the determinants of SUPPLY affect the price and availability of goods and services
SS.11.8.4 - Describe how the determinants of DEMAND affect the price and availability of goods and services
Thought Questions
Why were Europeans motivated to find new trade routes to Asia?
How did pirates affect the economies of Europe and their colonies?
What we are going to learn today
What is a Market
Imports and Exports
Price v. Availability
Supply and Demand
Profit/Loss
How things effect economics, like
Technology
Number Sellers
Government Regulations
What is a Market
The world of commercial activity where
goods and services are bought and sold
Consumers = Buyers
Producers = Sellers
Opening Markets in Asia
Tariffs
• T
Imports and Exports
*Trading*
Imports (into)
Exports (exit)
Things that are brought
into a place
Things that are
shipped out of a place
Balance of Trade
The amount of wealth generated from your exports
compared to the amount you spend on imports
What does Maui Import? What does Maui Export?
How does the balance of Imports and Exports affect Hawaii?
Imports and Exports
Europe and the Americas
From Asia
Pocelain
New markets in Asia & the Americas
brought new goods to European markets
And provided new consumers of
European goods
Spices
Spice Trade
Tariffs
• T
Animal
pelts were
big business
Known as
“Soft Gold”
Pelts from
Beavers,
Otters, seals
and other
cold
weather
animals
Fur Trade
Slave Trade
Tariffs
• T
Slave Trade
Major Cash
Crops that
drove the
Slave trade
Silver Trade
Biggest Silver reserves came from the Americas and Japan
Mercantilism & Colonies
Countries try to
make profits off of
a positive
balance
r
of trade
Colonies increased
a counties exports
Hoard precious
resources like gold
and silver
More colonies
meant more profits
could be made
through trade
Supply and Demand
Supply
How much of a good or
service is produced
$$$$$
$$$$
Demand
How many people want
a good or service
$$$
$$
Indicator for Producers
How much they should
produce and how much
they should sell for
$
#
###
#####
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Change in Supply
Supply goes up
Supply
Down
and demand stays the
producers have to
sell for less price to get
rid of lager supply
Supply
Up
same
$$$$
$
$$$$
Supply goes down
$$$
$$
$
#
###
#####
#######
And demand stays the
same producers can
sell for higher prices
because less people
have the product
therefore the demand
would be higher
Change in Supply
Rum gets shipped from a port in
the Caribbean to Europe
Pirates affect the Supply by stealing all the Rum
What happens to
the price of Rum
in Europe?
Change in Supply
Spanish discover huge amounts of silver in
Bolivia and produced 85% of the world’s Silver
What happens to the
price or value of silver
around the world?
Silver is the 1st global currency
Price of Silver Over Time
Change in Demand
Demand goes up
and supply stays the
same producers can
sell for higher prices to
as people will pay more
$$$$
$
$$$$
Demand
Down
$$$
Demand goes down
$$
Demand
Up
$
#
###
#####
#######
And supply stays the
same producers have to
sell for lower prices
because are not as
willing to pay high
prices
Change in Demand
Many countries got in on the
fur trade in North America
Global climate
got colder
Fur became fashionable
What happens to the
price of fur?
Price Vs. Availability
The more abundant a good or
service the less it costs
$$$
$
p
r $$$
i
c $$
e
$
The harder it is to find a good
or service the more it costs
Very Rare
Rare
Abundant
Availability
Example: Pineapples &
Diamonds
Price Vs. Availability
Pineapples
Diamonds
Price Vs. Availability
What determines availability?
Distance
Goods coming all
the way from
Asia were
expensive due to
distance
Specialization
Anyone can work
at McDonald's
while there are
only a few people
that can perform
surgery
Limited Resources
As goods like oil
and gold get used
up their price will
go up
Profit/Loss
Cost
How much money does it take to
make a good or provide a service
Revenue
How much money comes from the
sale of a good or service
Profit
When you generate more revenue
than it cost to produce
Loss
When revenue is less than what it
costs to produce a good or service
Technology
Then
Now
Cheaper Energy
Bigger, Faster,
Safer Ships
Faster, Safer Sea Routes
found by explorers
Canals
create shorter
shipping lanes
Number Sellers
Competition
Drives prices down
When one seller lowers
prices more consumers will
choose the lower price, other
sellers have to lower to
prices to compete
Monopoly
When there is only one seller
in a market
Why are Monopolies bad?
What happened to the price of Asian Spices in Europe as more
countries began colonizing in Asia and importing Asian Spices?
Tariffs
Tariffs
• Taxes that are charged to
imports
• Countries make $$$ at
trade ports as people pay
tax to bring in goods
• Prices go up as tariffs
become additional Cost
Contraband and Smuggling
Contraband
• Goods that are illegal
• Countries would make rival
country’s imports contraband
to prevent them from making
$$$ in their ports
Smuggling
• Bringing in illegal goods
• Very profitable
• Prices go up as contraband
goods are less available and
are a high risk to import