9/8 Update your agenda!

What is Economics? Economics- production, distribution, and use of goods and services The study of how people meet their needs

3 Types of Economic Systems 1) Market 2) Command 3) Traditional

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

Command Economy Government makes decisions No incentive to work harder Also known as communism No incentive to work harder Dictates lives of individual workers Manages all elements of production China, Cuba, Vietnam, and North Korea are the world’s major communist countries

Traditional Economy based on agriculture Most families in a traditional economy only grow enough for themselves Traditional economies are usually poor. The people concentrate on survival, not making money Usually found in 3rd world countries Bangladesh and Ivory Coast still have traditional economies

GNP GNP (Gross National Product)- The value of all goods and services a country produces in one year Rank Country/Region GNP (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

GDP GDP (Gross Domestic Product)- How much each individual produces within a year GNP divided by the population = GDP Rank Country US $ 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] 44,480 9  Canada 43,472 10  Australia 43,073

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

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

Cultural Diffusion The spread of cultural characteristics Foods, music, clothing, ideas, technology

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?