1. What is Economics? Economics- production, distribution, and use of goods and services – Simple Definition: The study of how people meet their needs People trade for the things they need Question #1

2. 3 Types of Economic Systems 1) Market 2) Command 3) Traditional Question #2

3. Market Economy Decisions made by individuals (what to make, sell and buy) supply and demand – Also called capitalism Based on trade and competition Some government regulation (laws, taxes) USA, Great Britain, Canada, France, and Japan have a market economy Question #3

4. Command Economy Government makes decisions – Also known as communism No incentive to work harder Workers are told what to do China, Cuba, Vietnam, and North Korea are the world’s major communist countries Question #4

5. Traditional Economy Economy based on agriculture Traditional economies are usually poor. The people concentrate on survival, not making money Usually found in 3 rd world countries Bangladesh and Ivory Coast still have traditional economies Question #5

6. GNP GNP (Gross National Product)- The value of all goods and services a country produces in one year. RankCountry/RegionGNP (US $) World 72,689,734,000,000 1 United States 16,244,600,000,000 2 China 8,358,400,000,000 3 Japan 5,960,180,000,000 4 Germany 3,425,956,000,000 5 France 2,611,221,000,000 6 United Kingdom 2,471,600,000,000 7 Brazil 2,254,109,000,000 8 Russia 2,029,812,000,000 9 Italy 2,013,392,000,000 10 India 1,875,213,000,000 Question #6

7. GDP GDP (Gross Domestic Product)- How much each individual in a country produces within one year. (Also known as Per Capita) GNP divided by the population = GDP RankCountryUS $ 1 Qatar 98,814 2 Luxembourg 78,670 3 Singapore 64,584 4 Norway 54,947 5 Brunei 53,431 6 United States 53,101 — Hong Kong 52,722 7 Switzerland 46,430 8 San Marino [6][7]San Marino [6][7] 44,480 9 Canada 43,472 10 Australia 43,073 Question #7

8. Supply and Demand We use Supply and Demand to determine how much goods will cost The more of something you have, the less valuable it becomes BrainPop: Supply & Demand Question #8 & #9

9. What are those?!?!?!?! Jordan 11 Infared’s average price is $150 – Low supply (not many are made) – High quality materials – People are willing to pay a high price for them (high demand) Wal-Mart basic shoes are about $15 – Large supply (a lot are made) – People go to Wal-Mart to save money

10. Cultural Diffusion The spread of cultural characteristics – Foods, music, clothing, ideas, technology Question #10

11. Think! How can the presence or absence of natural resources and arable land affect a nation’s economy, regardless of the type of economic system?