Presentation on theme: "2 Our Global Economy 2-1 Economics and Decision Making"— Presentation transcript:
1 2 Our Global Economy 2-1 Economics and Decision Making CHAPTER 24/6/2017CHAPTER2Our Global Economy2-1 Economics and Decision Making2-2 Basics of Economics2-3 Economic Systems2-4 Achieving Economic Development2-5 Resources Satisfy NeedsINTERNATIONAL BUSINESS
2 LESSON 2-1 Economics and Decision Making GOALSDescribe the basic economic problem.List the steps of the decision-making process.
3 The Basic Economic Problem 2The Basic Economic ProblemScarcity refers to the limited resources available to satisfy the unlimited needs and wants of people.Economics is the study of how people choose to use limited resources to satisfy their unlimited needs and wants.
4 Making Economic Decisions 2Making Economic DecisionsCoping with scarcityMaking choices
5 The Decision-Making Process 2The Decision-Making Process
6 LESSON 2-2 Basics of Economics GOALSDescribe how the market sets prices.Explain the causes of inflation.
7 Price-Setting Activities 2Price-Setting ActivitiesSupply is the relationship between the amount of a good or service that businesses are willing and able to make available and the price.Demand is the relationship between the amount of a good or service that consumers are willing and able to purchase and the price.Market price is the point at which supply and demand cross.
8 Market Price Is Set by Supply and Demand 2Market Price Is Set by Supply and Demand
12 2Natural ResourcesAlso known as land, these resources are the raw materials that come from the earth, from the water, and from the air. Iron ore, gold, silver, agricultural products, rivers, and oxygen are examples of natural resources.These items are used in the production of goods and services consumed by individuals, businesses, and governments.
13 2Human ResourcesAlso known as labor, these resources are the people who work to create goods and services.While technology has changed or eliminated certain tasks previously performed by people, new types of work are continually being created.
14 2Capital ResourcesAlso called capital, these resources include buildings, money, equipment, and factories used in the production process.These items are expensive and are used over several years by business organizations.
15 2Economic SystemThe economic choices of a country relate to three basic questions:1. What goods and services are to be produced?2. How should the goods and services be produced?3. For whom should the goods and services be produced?
16 Types of Economic Systems 2Types of Economic SystemsCommand EconomiesMarket EconomiesPrivate propertyProfit motiveFree, competitive marketplaceMixed Economies
17 LESSON 2-4 Achieving Economic Development GOALSDescribe the factors that affect economic development.Identify the different levels of economic development.
18 Development Factors 2 Literacy level Technology Agricultural dependency
19 Types of Development 2 Industrialized countries Less-developed countriesDeveloping countries
20 Levels of Economic Development 2Levels of Economic DevelopmentLess- Developed CountryDeveloping CountryIndustrialized CountryLow literacyLimited technologyAgricultural or mining economyImproving literacyImproving technologyDecreasing dependence on agriculture or miningHigh literacyModern technologyIndustrial economy
21 LESSON 2-5 Resources Satisfy Needs GOALSDiscuss economic principles that explain the need for international trade.Identify various measures of economic progress and development.
22 The Economics of Foreign Trade 2The Economics of Foreign TradeAbsolute advantage exists when a country can produce a good or service at a lower cost than other countries.Comparative advantage exists when a country can produce a good or service with more efficiency than other countries.
23 Measuring Economic Progress 2Measuring Economic ProgressMeasure of ProductionGross domestic product (GDP)Gross national product (GNP)International Trade ActivityBalance of tradeForeign exchange rateForeign debtOther Economic MeasurementsConsumer price index (CPI)Unemployment rate