What s Going on in the graph below?

Transcription

1 Unit 2: Basic Econmic Principles: Supply, Demand & the U.S. Economy Lesson 3: Circular Flow Model & Factors of Production The fundamental decision making units in a market economy are firms and households. A firm is an entity that produces goods or services. Firms take resources (like labor, capital, and other inputs also known as the factors of production) and transform them into products that people or other firms wish to purchase. Instructions for double entry daily commentary / warm up: Open binder to section for this unit; find & label your template. COLUMN ONE: IDENTIFY facts, information, and evidence. COLUMN TWO: INTERPRET the document. React, ask questions, etc. I see / It looks like / According to the article I think / I feel / I wonder /this reminds me What s Going on in the graph below?

2 Complete the last 2 sheets of the Building Skills Handout If already done: Review Packet

3 Unit 2: Basic Economic Principles: Supply, Demand, & the U.S. Economy Lesson 3: Circular Flow Model & Factors of Production LESSON ESSENTIAL QUESTION : What decisions must societies make about the distribution of economic resources? Lesson Vocabulary: Circular Flow Model Consumers Producers Factors of Production Capital Entrepreneurship Land Labor Basic Economic questions what to produce how to produce how to distribute wealth/work product Learning Goals: I can explain the circulation of resources, products, and money between producers and consumers I can distinguish between capital, entrepreneurship, land, and labor and generate examples that show the need for each of these factors of production is required Lesson Plan Daily Commentary New Material: Circular Flow Model Factors of Production

4 Producers & Consumers Producers make stuff to sell for a profit Producers create SUPPLY Consumers buy things they need or want Consumers create DEMAND But what do producers DO with the money they make? But where do consumers GET the money they spend?

5 Circular flow model Money circulates in the economy, moving back and forth between producers and consumers simulation

6 Circular Flow Economic Model Quick Write (answer both in Classroom): What two things do companies / producers get from individuals? What two things do individuals get from producers / companies?

7 OK so how do producers decide what to make?

8 Scarcity forces us to make choices: BASIC ECONOMIC QUESTIONS: 1. What to produce 2. How to produce it 3. Who gets what and how much? Who answers these questions? - Enter politics.

9 What goes into your pencil?

10 Factors of Production CELL: Capital Entrepreneurship Land Labor

11 Capital When wealth is used to create more wealth Goods used to make other goods and services Machines, buildings, and tools can be used to make other things

12 Capital

13 Capital Goods vs. Consumer Goods Capital Goods Used to make other goods Consumer goods Final products that can be sold or used directly

14 Factors of Production: Identify each factor of production in the video clip

15 Entrepreneurship Taking the initiative to start a business Requires having a business plan to succeed Must be willing to take risks Thinks big

16 Land Natural resources Anything not made by human beings Trees Cotton Water Iron

17 Labor Human resources anything that someone does (mental or physical) to produce a good or a service Picking crops Designing a microchip Bringing a meal to a table

18 Land + Labor = Wealth Wealth created when human labor adds value to natural resources

19 Examples of wealth Can be for sale, or for personal use Turning trees into pencils Taking a pencil and drawing something

20 BUT WHO GETS TO BE WEALTHY? When we make all this stuff, who benefits from it? DEPENDS ON WHAT SORT OF ECONOMIC SYSTEM WE HAVE. EACH ANSWERS THE BASIC ECONOMIC QUESTIONS DIFFERENTLY: COMMAND? MARKET? MIXED? TRADITIONAL?

21 ASSIGNMENT: PT Create a production plan for one of the following products: A Big Mac, a car, a chair, a book Create a cartoon strip or diagram that shows each factor of production required to create your product: Capital, Entrepreneurship, Land, and Labor Alternative Option: write a rap or poem that applies each factor of production