Definitions work sheet

 You are in charge of all the money coming into your home every month  What factors would you have to consider in deciding how to spend that money?  Everybody in you house will have different ideas on what's important and what it should be spent on  That’s economics

 We will looking at the economic systems of Canada and its largest trading partner, the United States  What values shape these systems, how they are different, and how they are the same

 Cartoon, pg 199  Why didn’t the manufacturer make more games?  Why did the truckers go on strike?  Why did the store decide to sell the game for less?  Why would anyone buy it for $99.99?

 The demand for super cyborg city was so great it created a scarcity of the productscarcity  To many people wanted the product, and not enough copies were available  Some things people need are unlimited- ex air  Most things that people need or want are limited. This is because resources are limited  In economics resources include, money, labour, and materials

 Land  Materials found in the natural environment needed to produce goods and services, such as renewable and non-renewable resources  What impacts might this decision about using the land have on the land?

 Labour  Labour consists of the physical and mental effort needed to produce goods and services  Construction workers building a house- if there aren’t enough workers, fewer houses get built How do choices concerning jobs effect the work force?

 Capital  Consists of money that people own or borrow, used to purchase equipment, tools, and other resources needed to produce goods and services  Ex- setting up a plane production plant requires money What if the capital that built this airplane were invested in something else? How might this impact airports and air services?

 Get into 4 teams  Each team will choose whether they would prefer to live in a jungle or a zoo. Make sure you write your decision at the top of the page.  Answer the questions from that perspective.

 Who would rather live in a jungle? Who would choose the zoo? Explain your answers.  What are the most important reasons for your personal choices? What values or beliefs emerge in these answers?  Can you think of countries that could be compared to jungles or zoos?  What does the country you have chosen have in common with the jungle or zoo?  Speculate on:  – the living conditions  – the type of government  – the economic activities  – the individual happiness and collective well-being.  What are the drawbacks to living in the environment you initially chose?

 An economic system is a way to solve the basic problem of scarcity.  Economic systems can be placed on a spectrum; their spot on that spectrum depends on the underlying values of that society

More government control Less government control

 At this end of the spectrum, the government makes all the decisions about how to solve scarcity.  The Government owns and manages all the resources needed to produce things  Resources are publicly owned  Government makes all decisions about resources  Individual consumers have little influence on decision making  Ex. Former USSR

 On this end of the spectrum, the choices of individuals solve scarcity  Private businesses manage and sell their own resources  Businesses succeed if they sell products consumers want, otherwise they fail  The government does not get involved  Ex. The United States

 Combines private ownership and government control  Individuals and government make decisions about what to produce  The level of government involvement depends on what political party is in power  Liberal Party-More involvement  Conservative Party-Less involvement  Ex- Canada, Sweden

 The Canadian and American economic systems are very similar, but they developed from different starting points  Their starting points involved different answers to the fundamental question “what’s the best way to achieve the public good?”

 The Public Good and Cooperation  The belief that individuals must consider each other and set aside their individual differences to achieve what’s best for society  What style of economic system do you think this idea fits?  The Public Good and individualism  the belief that what's best for each person individually adds up to what best for society  What style of economic system do you think this idea fits?

 Canadian Economy pg  How might the history of Canada shape the value and attitudes in Canada?  The U.S. Economy pg 208  How might the history of the U.S. shape the values and attitudes in the U.S.?  Video- VHS Capitalism vs. communism  Public Good Worksheets

 Supply and demand control the market system through a cause-and-effect relationship related to price.  Supply and demand effect quality of life because they affect the prices of products we buy, the availability of products, and jobs connected to creating products.  Supply and Demand Activity

 Demand is the quantity of a good that consumers will buy. The demand for the good is related to the price of that good.  Generally, the higher the price of a good, the less people will want to buy and therefore, the lower the demand. When something is expensive, people will purchase less of it or a substitute.  The opposite is also true: the lower the price of a good, the more people will want to buy and the higher the demand will be. When something is cheap, people will want to buy more of it.

 Supply is the quantity of a good that producers are willing to make and offer for sale in the market. The supply of a good is related to the price of that good.  Generally, the higher the price of the good, the more producers will want to make and the greater the supply.  The opposite is also true: the lower the price of a good, the less producers will want to make and the lower the supply will be.

 Competition is about striving to get consumers to buy their products  Producers attract consumers in a variety of ways-price, product quality, and advertising  Many factors can affect competition, including the value of consumers and decisions by the government to get involved in decisions about supply and demand  Ex: coke vs. Pepsi, ford vs. GMC, Nike, vs. Adidas  2 Donut shops case study- pg 212

 Prices in a free market system are determined by the interaction of supply and demand.

 The price of a good will naturally move to a level where the quantity demanded is EQUAL to the quantity supplied. At this point, the market is said to be at EQUILIBRIUM.

 In a free market system, the equilibrium price and quantity of most goods are constantly changing as the market adjusts automatically to changes in the level of supply and demand.  Lemonade Lemonade

 Firms are encouraged to increase production of those goods that are in high demand and to reduce production of less popular goods  Goods are made available to consumers at the lowest possible price  Ford Motor company grew because of their ability to supply cars to the consumers for a lower price due to the invention of the assembly lineassembly line

 Market economies rely on the decisions of individuals consumers and producers  Sometimes the government may get involved to inform, protect or ensure good and fair practices  Ex. The B.C. government started its own auto insurance program because it believed private insurance companies were to expensive  Can you think of any other reasons why the government may get involved?

 The free market economy does not grow at a constant rate. Instead, it goes through a continuing series of “boom” and “bust” periods called the business cycle.

 period of prosperity and economic growth  high level of employment  wages and profits rise, therefore spending increases  GDP (gross domestic product) is high  Problem: INFLATION

 Economic decline and crisis  production decreases, therefore unemployment rises and wages fall  consumers restrict spending, therefore prices and profits drop  RECESSION – mild and short lived downturn  DEPRESSION – longer and severe period of decline

 Governments intervene in the economy by changing their level of spending and the supply of money to try to even out the boom and bust cycles

 Look at the examples on pg 214 and 215  To what extent do you agree or disagree with the involvement of the government in each example?

 Entrepreneur – a person who ORGANIZES a business and takes the RISKS associated with competing in a market economy  They are the heart of the market system  The following are clips from CBC television’s reality show Dragon’s Den:  Dragon's Den Dragon's Den  Dragon's Den 2 Dragon's Den 2

 Read the case studies on Page 226 and 229 and answer the questions

 Break into 3 groups  1) Supply  2) Demand  3) Price  I will read some “what if “ Statements. You as a group must decide what will happen  Will the supply/demand/price go up?  Will the supply/demand/price go down?