Announcements. Please pick up the course outline and notes from the back.

Transcription

1 Day #1 1/26-29

2 Announcements Please pick up the course outline and notes from the back.

3 Corny Jokes 1. How did the octopus beat the shark in a fight? BECAUSE THEY WERE WELL-ARMED! 2. What is the best thing about living in Switzerland? I DON T KNOW, BUT THEIR FLAG IS A BIG PLUS! 3. Did you hear about the new broom? IT S SWEEPING THE NATION!

4 Remind: ODD to #81010 *Standard message rates apply

5 Remind: EVEN to #81010 *Standard message rates apply

6 Cell-phones

7 Introduction 1. True or false: Economics studies how to make money in the stock market. 2. True or false: The US dollar is backed by gold (You can trade it in for a set amount of gold for each dollar). 3. True or false: The US economy is doing very well compared to the rest of the world. 4. True or false: The unemployment rate is lower than prior to the Financial Crisis of True or false: China is the largest lender to the US government. (The government borrows the most from China).

8 Economics Addresses these questions: 1. Why are some countries rich and some countries poor? 2. What happened in 2008 to cause the worst recession since the 1930s? 3. Why have income and wealth become more unequally distributed over the past few decades? 4. Why are some goods more expensive than others? 5. How will the workforce change with advances in robotics, automation, and artificial intelligence?

9 Economics The study of how individuals use limited resources to meet their unlimited resources to meet their unlimited wants and needs in order to make themselves better off.

10 Scarcity Limited resources Unlimited wants and needs = Scarcity Forces choices

11 Limited Resources

12 Products

13 Unlimited Wants and Needs

14 Stand and share 1.What is the definition of economics? 2.What is scarcity and why is it important? 3.Identify and briefly describe each resource. 4.How are resources and products related? 5.What are products? 6.What are goods? 7.What are services?

15 Ch. #2, The Organization of Economies The Basic Economic Questions 1. What to produce? 2. How to produce? 3. For whom to produce it for?

16 Ch. #2, The Organization of Economies Economic systems / economies Rules / parameters Way to ensure allocative and productive efficiency Productive efficiency Allocative efficiency Four types: 1. Traditional 2. Centrally planned / socialism / command 3. Pure market / capitalism: individuals 4. Mixed (mixed market)

17 Ch. #2, The Organization of Economies Traditional Economic System Rural and underdeveloped Tied to the land; farming Basic economic questions: Tradition and custom

18 Ch. #2, The Organization of Economies Command Economic System (Centrally Planned) Controlled by a centralized planning authority Resources owned by the government Government sets prices Core of communist ideology Basic economic questions: government

19 Ch. #2, The Organization of Economies Command Economic System (Centrally Planned) Advantages Mobilize resources quickly and on a massive scale Focus is on the good of society Disadvantages Difficult to gauge / determine demand: shortages occur Lack of incentives for innovation and working hard

20 Ch. #2, The Organization of Economies Market Economic System (Capitalism) Consumers and producers have the freedom of choice to act in their own self-interest No government intervention: laissez-faire Basic economic questions: co Consumers and producers (demand and supply)

21 Ch. #2, The Organization of Economies Market Economic System (Capitalism) Advantages Lots of incentives Efficiency from competition Disadvantages Elderly, disabled, those without skills: not cared for Economic needs have priority of social needs

22 Ch. #2, The Organization of Economies Mixed Market Economic System Combination of command and market economies: MORE MARKET ECONOMIC CHARCTERISTICS Government is involved in a few areas: this differs by nation Government intervenes to protect certain groups and provide public goods Basic economic questions: the government, consumers, and producers (demand and supply)

23 Ch. #2, The Organization of Economies Mixed Market Economic System Advantages Less government intervention than a command economy: efficient Protects elderly, disabled Helps those who experience misfortune: unemployed; those without health care Disadvantages Sometimes there is too much government intervention If the taxation rates are not high enough, there could be government debts and deficits

24 Practice: Day #1 Directions: Create an organizer by dividing your paper into four (4) parts and label each part one of the four (4) economic systems. For each economic system: 1. Identify who answers the basic economic questions. 2. Identify an two (2) advantages and disadvantages for each.