2. Economics Honors: Unit I Introduction to Economics, Economic Systems, & the American Economy Chapters 1, 2, & 3

3. What do you think of when hear the term: Economics?

4. Mr. U’s Definition of Econ. 1. Definition-1. Definition- 2. Why2. Why do we study it/need it- 3. What3. What is the Meaning of Life and how does this relate to Economics?

5. DO YOU HAVE EVERYTHING YOU NEED OR WANT?? WHY NOT???

6. Scarcity and Shortages Scarcity occurs when there are limited quantities of resources to meet unlimited needs or desires. Shortages occur when producers will not or cannot offer goods or services at current prices.

7. NEEDS and WANTS Need- YOUR NEEDS Wants- YOUR WANTS

8. Get yo’self a job homey We are all: Consumers- And we are all Producers- Two kinds of Producers Goods-Goods- ServicesServices

9. The Factors of Production Land All natural resources that are used to produce goods and services. Labor Any effort a person devotes to a task for which that person is paid. Capital Any human-made resource that is used to create other goods and services. Physical capitalHuman Capital

10. Entrepreneurship Definition- Examples:

11. Trade-offs and Opportunity Cost All individuals and groups of people make decisions that involve trade-offs. Trade-off- Opportunity Cost-

12. Marginal Analysis The Margin- Thinking at the Margin-

13. Production Possibilities A production possibilities graph shows alternative ways that an economy can use its resources. The production possibilities frontier is the line that shows the maximum possible output for that economy. Watermelons (millions of tons) Shoes (millions of pairs) 25 20 15 10 5 0 252015105 Production Possibilities Graph Watermelons (millions of tons)

14. Why are PPG’s Important 1.Efficiency- 2.Growth- 3.Cost-

15. UNIT I Part 2 Chapter 2: Economic Systems

16. What is an economic system?? Definition:

17. Answering the 3 Questions 3 Major Economic Questions Economic Goals

18. Four Economic Systems

19. What determines a nation’s/group’s/country’s economic system???? CULTURECULTURE

20. Culture and Economics Show and Tell 1.Bring in an artifact/symbol/sumthin’-sumthin’ that is an example of culture. (5) 2.Explain how that artifact/symbol/ sumthin’-sumthin’ is an example of culture (5) 3.Explain the connection between your cultural symbol and economics. (5)

21. Traditional Economies Characteristics: Why are there traditional economies?

22. Free Market Terms Households Firms Factor Market Product market

23. The Free Market Economy In a free market economy, households and business firms use markets to exchange money and products. Households own the factors of production and consume goods and services.

24. Adam Smith Smith’s Philosophy: SELF-INTERESTSELF-INTEREST INVISIBLE HANDINVISIBLE HAND COMPETITIONCOMPETITION SPECIALIZATION/DIVISION OF LABORSPECIALIZATION/DIVISION OF LABOR LAISSEZ FAIRELAISSEZ FAIRE Does it really work this way?

25. Advantages of the Free Market

26. Disadvantages of the Free Market

27. Organization of Centrally Planned Economies Socialism is a social and political philosophy based on the belief that democratic means should be used to distribute wealth evenly throughout a society society. is a political system characterized by a centrally planned economy with all economic and political power resting in the hands of the government. Communism is a political system characterized by a centrally planned economy with all economic and political power resting in the hands of the government. In a centrally planned economy, the government owns both land and capital. The government decides what to produce, how much to produce, and how much to charge.

28. Karl Marx 1818-1883 According to Marx the history of man is the history of CLASS struggles.According to Marx the history of man is the history of CLASS struggles. RICH VS. POORRICH VS. POOR Bourgeoisie VS. ProletariatBourgeoisie VS. Proletariat Have’s vs. Have NOT’SHave’s vs. Have NOT’S

29. “REAL” MARXISM The Rich take advantage of the Poor…man.The Rich take advantage of the Poor…man. The poor are exploited due to social discrimination and inequality… man.The poor are exploited due to social discrimination and inequality… man. There should be a way that all people should just live together in harmony…man.There should be a way that all people should just live together in harmony…man.

30. Marx’s Flow Chart Traditional Capitalism Have’sHave Not’s REVOLUTION (Rich vs. Poor)

31. Marx’s Flow Chart (cont.) Worker’s WIN!! Temporary Govt. Control Communism UTOPIA

32. The Pros and Cons of CPEs CONS

33. What is UP with China??? How is modern China affecting us: 1.Politically? 2.Economically? 3.Environmentally?

34. Mixed/Modern Economies 1.Limited 1.Limited laissez-faire. Why? 2. The Balance of Control & Freedom Too Much Control= Too Much Freedom=

35. John Maynard Keynes 1883-1946 1.British 1.British economist 2.Advocated 2.Advocated government intervention in markets when needed 3.Examples 3.Examples of intervention: 4. His book:The book:The General Theory of Employment, Interest, and Money

36. In a mixed economy In a mixed economy the government purchases goods and services in the product market, andthe government purchases goods and services in the product market, and purchases land, labor, and capital from households in the factor market.purchases land, labor, and capital from households in the factor market. Government’s Role in a Mixed Economy

37. Comparing Mixed Economies. An economic system that permits the conduct of business with minimal government intervention is called free enterprise. The degree of government involvement in the economy varies among nations. Continuum of Mixed Economies Centrally plannedFree market Source: 1999 Index of Economic Freedom, Bryan T. Johnson, Kim R. Holmes, and Melanie Kirkpatrick Iran North Korea Cuba China RussiaGreecePeruUnited States South AfricaFranceUnited Kingdom BotswanaCanadaSingapore Hong Kong

38. UNIT I PART 3 Chapter 3 The American Economy

39. And now…a brief history of the American Economy…....\..\the American Economy.ppt

40. This means that PEOPLE can form their own business and pursue WEALTH! GREED is NOT illegal. Consumers influence producers through their buying decisions.Consumers influence producers through their buying decisions. 2. Consumers influence the government’s economic policies through voting and other techniques. A Tradition of Free Enterprise Americans have traditionally favored economic freedom over economic regulation.

41. The basic political issue with the American economy is a question of giving up economic ___________________ for economic _________________________!!! DEMOCRATS FAVORREPUBLICANS FAVOR __________________________________________

42. How is the American Government involved in the American Economy??? 1.Government responds to public interest by enacting public policy, or laws and standards on topics of public interest. 2. Protecting Health Safety, and Well- Being Major Federal Regulatory Agencies Agency and Date Created Role

43. Debate Topic: Government Involvement The United States Government is HIGHLY involved in the American economy. HOW?? Bring in an example (article, symbol, artifact) that symbolizes the involvement of the U.S. government in the U.S. economy. (5)Bring in an example (article, symbol, artifact) that symbolizes the involvement of the U.S. government in the U.S. economy. (5) Explain your opinion of the example. (5)Explain your opinion of the example. (5) Generate Debate (5)Generate Debate (5)