Transcript The Circular Flow Of Economic Activity

The Circular Flow Of
Economic Activity
Answer on a sheet of paper…
• 1) When you spend money, where do you
spend it?
• 2) Think of the sources of income in your
household. Where does your household
income come from?
• NOTE: List AT LEAST three things for
number one.
Microeconomics
• The study of how individuals and firms
make decisions to allocate scarce
resources.
With your group members…
• Look at your lists.
• What do your answers to number 1 have
in common with each other?
• What do your answers to number 2 have
in common with each other?
• Write these down on one sheet of paper
under the headings “#1 in common”, and
“#2 in common”.
Market
With your group members…
• Brainstorm words that you associate with
the word “market”.
• 5 words per group member.
• Write them down.
With your group members…
• Brainstorm a list of things that a business
or businesses might spend money on.
• Be specific!
• 3 entries per group member.
• Write them down.
So Far...
• 3 actors in the economy:
– Producers
– Consumers
– Government
• Consumers buy goods and services.
• Producers buy the factors of production.
Obtain a marker board &
marker.
Copy the diagram on the board.
How should the arrows be
labeled?
Discuss with your groups.
The 1st 3 groups with correctly
labeled graphs get candy!
Group Quiz
Each person should enter
answers in on their own clicker.
1) Which numbers show the flow of
goods and services?
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A) 1, 3
B) 5, 7
C) 4, 2
D) 8, 6
2) Which arrows include Mr. Cook’s
efforts in composing this lesson?
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A) 1, 3
B) 5, 7
C) 4, 2
D) 8, 6
3) Which arrows could include
video games?
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A) 1, 3
B) 5, 7
C) 4, 2
D) 8, 6
4) Which numbers show the flow of
interest, wages, rent, & profits?
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A) 1, 3
B) 5, 7
C) 4, 2
D) 8, 6
5) What do numbers 1, 3, 6, & 8
have in common?
• A) They’re
goods.
• B) They’re
services.
• C) They’re FOP.
• D) They’re
money.