D AY 4 F R I D AY, J A N U A RY 8 TH

Transcription

1 ECONOMICS D AY 4 F R I D AY, J A N U A RY 8 TH

2 OPENER: DAY 4 - FRIDAY, JANUARY 8 TH Kahoot Review! If you have a smartphone take it out. If not, pay attention so you get the benefit of the review. Go to kahoot.it in your internet browser ( and put in the Game-pin # Your nickname MUST be your first and last name (Example: JohnSmith) click Join Game

3 OPENER: DAY 4 - FRIDAY, JANUARY 8 TH Econ Basics Quiz Clear off your desk you only need a pencil or pen All electronics should be put away No talking, squawking (disruptions), gawking (looking around) or walking during any assessment Make sure to write your name on it and follow all instructions Raise your hand if you have any questions Double and triple check your answers, then Raise your hand when you re done When you re papers are collected, be quiet until everyone is done

4 WHAT DID WE LEARN YESTERDAY? Economic Equation Land + Labor + Capitol = Output Natural Resources + Human Resources + Capitol Resources = Output T.O. = Trade Off- the sacrifice of one good in order to purchase or produce another. The cost of the T.O. is called a O.C. Opportunity Cost- the value of the next best alternative in terms of money, time, value and utility.

5 WHAT DID WE LEARN YESTERDAY? Economic Goal = Achieve the highest productivity or output with our resources or inputs. Don t waste anything - materials, energy, efforts, money, and time Productivity the value of our output for every unit of input (i.e. efficiency)

6 WHAT DID WE LEARN YESTERDAY? To be more productive we must: Create more output with the same inputs Create same output with less inputs How to increase productivity? Division of Labor Specialization Invest in human capital

7 WHAT DID WE LEARN YESTERDAY? We measure and compare productivity using a Production Possibilities Curve (or Frontier) A Production Possibilities Curve (PPC) shows all of the possible combinations of two goods or services that can be produced within a stated period given two assumptions: 1. That the amount of available resources and technology will not change. 2. That all of the factors of production are being used in the most efficient way.

8 WHAT DID WE LEARN YESTERDAY? PPC Rules: 1. Any point on the PPC uses existing resources efficiently 2. Any point outside the PPC is not realistic, attainable or sustainable given existing resources 3. Any point inside the PPC is inefficient

9 WHAT DID WE LEARN YESTERDAY? PPC Movements Movement PPC moves to the right/outward PPC moves to the left/inward Point is inside the PPC Reasons More Resources Better Technology Fewer Resources Wars Natural Disasters: Earthquakes, etc. Disease: Ebola, Bubonic Plague Resources are not being used efficiently

10 ECONOMIC SYSTEMS An economic system is a system of production and exchange of goods and services as well as allocation of resources in a society. The system is determined by who answers the 3 basic economic questions 1. What goods & services to produce? 2. How should these goods & services be produced? 3. Who gets to consume these goods & services?

11 TRADITIONAL ECONOMY Traditional Economy an economic system that is based on customs and beliefs. People will make what they ve always made. They do things the same way as their parents and grandparents. People are not free to make their own decisions on what they want. Exchange of goods is done through bartering exchanges with no money involved Examples of these societies do not really exist any more. Native American societies and India in the past were like this.

12 COMMAND ECONOMIES Command Economy One in which a central authority makes all economic decisions about how best to allocate resources. Examples of these economies include Cuba, North Korea, and China.

13 MARKET ECONOMY Market Economy One in which people or businesses use their own best interest to make a profit. These economies are based on supply and demand. Buyers and sellers answer the economic questions as they come together to exchange goods and services. Examples include the USA, Great Britain and Japan

14 MIXED ECONOMY Market + Command = Mixed Economy There are no pure market or command economies. To some extent, all existing economic systems demonstrate characteristics of both systems and can be called mixed economies. Economies are usually closer to one type of economic system than the other. People/businesses own most resources and determine what & how to produce, but the government may regulate certain industries.

15 STRENGTHS OF THESE ECONOMIES Traditional Sets certain economic roles for all members of the community. It is stable, predictable, and continuous for life. Command Capable of dramatic changes in a short time. Market Very resilient and self-sustaining. Is able to selfadjust to change gradually. Individual freedom for everyone. Notable lack of government interference. Decentralized decision making. Variety of goods and services. High degree of consumer satisfaction.

16 WEAKNESSES OF THESE ECONOMIES Traditional Discourages new ideas and new ways of doing things. Usually has a lack of progress. Command Does not meet the needs of consumers. Lacks incentives to get people to work. Has little flexibility to deal with small changes. New ideas are discouraged. Market Rewards only productive resources. Many people are too young, old, or sick to work. Must guard against market fluctuations.

17 ECONOMIC GOALS OF THE USA Economic Freedom Be whatever you want to be. Economic Efficiency Waste few resources Economic Equity Anyone can get ahead regardless of gender, ethnicity, etc. Economic security Protect workers from downtimes in economy Full employment Everyone who can work should work Price stability Prices shouldn t jump up or drop down too dramatically. Economic growth Economy should improve every year

18 ALL MARKET ECONOMIES SHARE Economic Freedom Be what you want to be Voluntary Exchange Trade with whoever you want (almost) Private Property Government doesn t own business and land Profit motive Motivated by Money

19 CONTINUUM OF ECONOMIC SYSTEMS

20 QUESTIONS FOR REFLECTION What are the four economic systems? Which economic system would you like to live in? And why? How would you feel if a central government controlled what you could buy and all prices?

21 HOMEWORK DAY 4, JANUARY 8 TH Remember review your notes from class! Unit One Test next week Before you leave class today, make sure to get your Guided Reading for tonight! Using your Economics textbook or online textbook, read the rest of Chapter Two Sections 3 and 4. As you read, write in all missing words and phrases. Remember to answer the questions at the end with complete thoughts and sentences.