5 Wants and Needsgoods: physical items – food, clothing, cars, housing, etc.services: activities people do for a feeproducer: person or business – makes goods or provides a service
6 Resources and Scarcity natural resource: gift of nature – part of the natural environment, - water, trees, mineralshuman resources: people – those who produce goods & provide servicescapital resources: money & property – used to produce goods and servicesscarcity: available resources – demand greater than supply
7 Making Choices Scarcity vs. producers & consumers Unlimited needs vs. wantsLimited resources vs. limited amounts of goods & servicesBasis of an economic systemchoosing how to use resourcesThose making choices in United Statesindividuals, businesses, & communities
8 Costs and Benefits Opportunity benefit Choices (getting a job vs. going to college)Immediate salary vs. getting an educationOpportunity cost – cost of choice not takenOther choices of opportunity benefits & costsUsing resources or using timeValue of non-chosen alternative
9 Trade-OffsEither/or choice: not always the bestMay combine parts of choices as trade-offTrade-off choices to get wants & needs
10 Supply and Demandsupply: quantity of a good or service offered for saledemand: quantity of a good or service consumers are willing to buyLower prices: consumers buy more, producers make less $ per itemHigher prices: consumers buy less, producers make more $ per itemprofit: amount left after costs are subtracted from price (motivator for producers)
11 Basic Economic Questions Four basic economic questions:1) What do we produce?2) How can it be produced?3) How much will it cost to produce?4) For whom will we produce?
12 Making the necessary decisions What to ProduceMaking the necessary decisionsMeeting needs & wantsHow to make the capital resource (money)Human resourcesNatural resourcesFinally, deciding what to produce
13 How to Produce Plan of action: Overall production schedules: How to carry out planProcess of implementationSupplies neededOverall production schedules:When to start productionWhen to end production
14 Items to consider for plan How Much to ProduceItems to consider for planTime involvedResources neededMarket demand for product (s) and/or service (s)Decisions affected by scarcity
15 For Whom to ProduceDevelop knowledge of consumersStudy needs of consumersConsider supply & demandAnalyze & plan for competitorsConsider advertising
16 Economic Systems economist: one who studies the economy Three basic kinds of economiesTraditional EconomyCommand EconomyMarket EconomyEconomy may function as combination of all three
17 Traditional EconomyCustoms, habits, & beliefs determine and answer the four basic economic questionsContinues in the way it has always been done
18 Command Economy The government … controls the economy answers the four basic questionsmakes the decisionshas power & authoritynegotiates input & outputcontrols competition
19 Market Economy Individuals… Answer the four basic economic questions based on supply & demandAlso known as free enterpriseBased on private ownershipFreedom of choiceClick here to return to Main Menu.
20 Section 2: Louisiana’s Economic History ESSENTIAL QUESTION:What were Louisiana’s early economic systems?
21 Section 2: Louisiana’s Economic History What words do I need to know?bartermercantilismsmugglingindigotobaccocommerce
22 Louisiana’s Economic History 1st economic system: barter (trading goods & services without money)Then mercantilism: command economy controlled by the governmentNext, smuggling: illegal trade with colonies of other nations
23 Louisiana’s Economic History Louisiana Purchase:end of colonial periodend of earliest crops tobacco & indigobeginning of agricultural marketNew market: sugar cane & cottonNew Orleans:became a major port for North America1801 described as “the grand mart of business, Alexandria of America”
24 Louisiana’s Economic History Early years of statehood: a continuing agricultural economy20 years before Civil War: a booming economyEnd of Civil War till after WWII: a struggling economyGrowth and survival of war-developed industries
25 Louisiana’s Economic History New equipment & machines brought by technologyHuman labor replaced by machinesMany farms deserted by workers1880 – 1920: most old growth trees cut or gone
26 Louisiana’s Economic History Oil (another resource)Became valuable in early 20th centuryEconomy base changed by new industryAgricultural economy changed due to WWII & demands for oilNew economic direction: interdependent global economy21st century: seeks diversity & less dependence on oil industryClick here to return to Main Menu.
27 Section 3: Louisiana’s Resources ESSENTIAL QUESTION:What roles do natural resources, capital resources, and human resources play in the economy of Louisiana?
28 Section 3: Louisiana’s Resources What words do I need to know?mineral resourcesnonrenewablelignitebiological resourcesrenewablepulpwoodlabor union
29 Natural Resources Economy supported by abundant natural resources Examples: air, water, & rich soil21st century: agricultural shift from small farms/plantations to huge agribusiness systemsFewer people on farmsAmount of crops not decreased
30 Natural Resources State ranking: 2nd in sugar cane & sweet potatoes Vital crops: rice, cotton, soybeansSoil & climate good for raising beef & dairy cattle (dairy farming diminished)Abundant water supply good for agriculture, industry, human use, transportation, & recreation
31 Mineral ResourcesOilNatural GasSaltSulfurLignite
32 Mineral Resourcesminerals: inorganic substances formed by Earth’s geological processesImportant to Louisiana’s economynonrenewable: not replaced by nature once extracted (taken) from the environmentMineral resources found in Louisianaoil (“black gold”), natural gas, salt, sulfur, ligniteConstruction resources in Louisianasand, gravel, limestone
33 OilOil for today’s energy created by decayed plants from millions of years ago10% of US oil reserves in LouisianaLouisiana: one of top oil-producing states in United States1901 – 1st oil well in Louisiana1947 – 1st platform in Gulf of MexicoMore oil deposits beneath Gulf of Mexico
34 Natural Gas Larger deposits than oil ¼ of the nation’s supply 1st burned as waste1917: “carbon black” developedused in making tires, ink, & moreImportant energy for homes & industry
35 Salt Needed for human & animal survival Used by Native Americans in tradeA form of money, laterRelied on by the Confederacy during the Civil WarUsed in chemicals & other productspolyvinyl chloride plasticPVC pipe for plumbing
36 Sulfur Major ingredient in: matches, gunpowder, medicine, plastic & paper1869 – “richest 50 acres in the world”town of Sulphur in Calcasieu ParishDecrease in valueforeign import changed importanceunprofitable to mine in Louisiana
37 LigniteSoft, brownish-black coalBurns poorlyMined since 1970sFound mostly in DeSoto ParishUsed for electric power station near Mansfield
38 Biological Resources Biological resources Common term: plants & animalsScientific term: flora & faunarenewable: replenish over timeMain divisions:ForestsWildlifeFish
39 Forests50% of Louisiana in forests2nd largest income producer90% pine trees75% trees cut for pulpwoodLarge trees cut for sawtimber
40 ForestsHardwood sawtimber used for furniture & flooringPaper mills, lumber mills, & plywood plantsChristmas tree farms started by the Office of Forestry in the LA Dept. of Agriculture
41 Wildlife Variety of wildlife Economic resources Hunting regulations History of trapping & hunting traditionEconomic resourcesFur pelts:Once sold more than a million pelts annuallyHunting regulationsState Department of Wildlife and Fisheries
42 Wildlife Hunting Timber cutting Source of food Recreation Millions of dollars for state’s economyTimber cuttingReduced forest landForest animals decreasedIncrease in recent years
43 Wildlife White-tailed dear Black bear Wild turkey Population has increasedBlack bearLargest wild animal in LouisianaEndangered: not legal to huntWild turkeyClassified as a game birdEfforts have been made to increase its numbers
44 Wildlife Dove Quail Migratory waterfowl Alligators 1963: placed on the federal protected species list1981: hunting under strict rulesMillions of dollars in hides & meat
45 Freshwater bream, bass, perch, catfish Game fish: Fish (Recreation)Freshwater bream, bass, perch, catfishGame fish:trout, redfish, drum, mackerel, blue marlin, amberjack, grouper, & tarpon (illegal to sell commercially)
46 Fish (Commercial)Crawfish raised on crawfish farmsCatfish sold: freshwater & farmsCommercial fishing: tuna, sea trout, red snapper
47 Capital ResourcesHuman-made products used to produce goods or servicesExamples: rice mills, sugar refineries, oil refineries, cotton gins, & meat-packing plantsOthers include: transportation facilities – bridges, highways, & airports
48 Human Resources People who supply the labor Physical or mental Paid for goods or servicesRequirementsnew skills & specializationeducation & trainingLabor unions – workers’ organization to protect workers’ rights1976 – right-to-work law passed – workers could not be forced to join a unionClick here to return to Main Menu.
49 Section 4: Providing Louisiana’s Goods and Services ESSENTIAL QUESTION:What is Louisiana’s place in the global economy?
50 Section 4: Providing Louisiana’s Goods and Services What words do I need to know?1. private goods & services2. public goods & services3. interdependent4. Superport5. tariff6. economic indicators7. gross domestic product (GNP)8. consumer price index9. inflation10. unemployment rate
51 Providing Louisiana’s Goods and Services free market: private goods & servicesLimited services & benefits to the ownersProvided by the government: public goods & servicesUsually available to everyonehighways, police, education, libraries
52 Manufacturing Louisiana-made goods include… Ships, trucks, electrical equipment, glass products, automobile batteries, & mobile homesChemicals industryRanks 2nd in USAPetrochemicals (chemicals made from petroleum)More than 100 chemical plants in LAFertilizers & plastics
53 ManufacturingBillions of gallons of gas from petroleum refineries each yearShipbuildingtransport ships & merchant vesselsCoast Guard cutters, barges, tugs, supply boats, fishing vessels, & pleasure craft
54 Aerospace and Aviation Louisiana workers part of the United States space programSpace shuttles assembled in New OrleansLake Charles aircraft assembly for military use
55 BiotechnologyCombines biological research with engineeringPennington Biomedical Center leader in research
56 Service Industries Adds billions of dollars to the economy Tourism sightseeingeatingshoppingfishing & huntingMardi GrasMovie-making1908 – 1st film made in Louisiana1917 – 1st Tarzan film madeMore recent – “Steel Magnolias”
57 Economic Institutions Joint effort to produce & sell goods and servicesGroups known as economic institutionsIncludeBusinesses large and smallCorporations: owned by investors, banks, & labor unionsBanks important: allow producers & consumers to trade, save, & invest
58 Louisiana in the U.S. and Global Economies 1st economic systems: simple barter economiesToday’s systems interdependentoverlapproducers & consumers rely on each otherLouisiana’s offshore port: Superport