6.2- Circular Flow. By: Carter Greene

Transcription

1 6.2- Circular Flow By: Carter Greene

2 Kickoff: Grab a chromebook and handout on your way into class Or you may use your own laptop Go to Google Classroom and complete the assignment Opportunity Cost Article To be done individually Roll Call: Have 10 kids or no kids?

3 Announcements: 4/ Quiz Also NFL Draft starts 5/4- Test 5/4- Budget Project Parts VIII-X due

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5 And I just can t wait, to be King. Background: Lebron was a high school basketball STAR His games were televised on Pay-Per-View and National TV as a 14 year old He could clearly compete and succeed against pro athletes as a high schooler What would have been some of the opportunity costs had LeBron attended college? Salary - ($13 Mil in first 3 years) Endorsements - ($90 mil over first seven years alone from Nike) Celebrity lifestyle

6 What are some of the opportunity costs of you not going to college?

7 There are some pretty good non financial reasons you should go to college too...

8 What are some opportunity costs of GOING to college: Up to 4 years salary Experience Economic independence Apartment Car No homework

9 GAME The following scenarios are typically things most people want to happen to them at some point in their life. With your group, decide what incentives drive people to do these things. Additionally, what are some of the opportunity costs of deciding to follow through with each of these decisions? Even the best decisions have opportunity costs! Be prepared to share.

10 Getting Married!

11 Quitting your job to start your own business!

12 Putting 50% of your Net Income into your 401(k)!

13 Retiring!

14 Purchasing a House!

15 Having Kids!

16 Under #6, come up with your own scenario Think, what is something most everyone wants to do in life but has an opportunity cost

17 6.2- Identify the elements of The Circular Flow of Economic Activity.

18 Circular Flow of Economic Activity Circular Flow of Economic Activities- exchange of money between businesses and households in the form of income and expenditures

19 Circular Flow of Income- Factor Market- where businesses buy factors of production from households Households (individuals) earn income from selling land, labor, and capital to businesses (firms) Factor market: Incomes Households Businesses

20 Circular Flow of Income Product Market- businesses supply goods and services for sale to households Households (people) return money to businesses by buying from businesses (firms) Factor market: Incomes Households Product market: Expenditures Businesses

21 Entitlements: Social Security, Medicaid, Medicare Services: Roads, Schools, Military, etc. Regulation: FDA, FTC, SEC, EPA, etc. Subsidies: Help promote the production of US goods Factor market: Incomes Entitlements and Services Taxes and Fees Households Taxes Regulation and Subsidies Government Businesses Product market: Expenditures

22 Mixed Economy Individuals and businesses pay taxes to the government Government uses money to regulate the economy, make public works, and provide for entitlements Factor market: Incomes Entitlements and Services Taxes and Fees Households Taxes Regulation and Subsidies Government Product market: Expenditures Businesses

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24 Name the market where each of these exchanges occur:

25 Product Market David buys a pair of socks from Belk.

26 Factor Market Becky sells a 100 acre plot of land to Harris Teeter so that Harris Teeter can use it to grow and farm their own strawberries.

27 Factor Market Abby waits tables at Lucha Tigre to earn some extra cash for the weekends.

28 Product Market Mitchell is 16 years old and is tired of the the wifi service his parents use so he decides to purchase his own wifi service with a new router just for his room.

29 Product Market Mr. Greene is having trouble getting his students to participate in class so he runs by Walgreens on the way to school and purchases ten bags of candy to incentivize his students to participate.

30 Factor Market After losing his job in the Wells Fargo scandal, Wes is desperate for money. Wes decides to sell his warehouse to Amazon so that he has enough income to support him and his wife Nadia until he finds a new job.

31 Product Market Nick used to be good with the ladies, but lately he has hit a dry spell and he can't seem to find himself a girlfriend. After talking with his friends, he realizes this may be due to the fact that he has smelled very bad recently. He goes to Target and purchases three new sticks of deodorant.

32 Product Market Gage is lost in New York City. He is currently standing in Time Square and has no idea how to get to Yankee Stadium. Gage orders an Uber to the stadium.

33 Factor Market CJ is finally hired to work his dream job: waiting tables in the KD dining room.

34 Factor Market Once again, Herbal Life is caught in a scandal suggesting that they have been running an illegal pyramid scheme. The company believes Reed was the whistleblower and he promptly loses his job. Reed must find a new job quickly so that he can continue paying his mortgage and his house doesn't go into foreclosure. Reed begins his new career as a pizza delivery man.

35 Let's see if you can draw it! Use the following terms to fill in each arrow: Goods/Services Subsidies Goods/Services Wages/Salary Expenses Factors of Production Income Factors of Production Taxes Entitlements Taxes Revenue