Fundamental Economic Concepts Grade 8 TCAP Prep

What is an Economic Market? It is where producers and consumers exchange goods and services. – Producers produce (make) goods and services – Consumers buy goods and services. Consumers buy goods and services from producers with money.

Good and Services Goods are products people use: – Cars – Food – Clothes – Houses – Furniture – Video games – Cell phones

Good and Services Services are actions that people perform. – Doctors perform exams. – Teachers teach students. – Mechanics fix people’s cars. – Barbers cut people’s hair. Can you think of other services that people provide?

Good and Services In Early America Goods Agricultural products Textiles Finished goods (usually from Europe) Services Taverns Blacksmiths Doctors Ministers

Money and Currency Money is a medium of exchange. It carries a value that producers will accept in exchange for a good or service. Money is measured in Currency The dollar is the United States’ currency

Competitive Market System A market system in which producers are free to produce whatever they want and consumers are allowed to buy whatever they want.

Supply and Demand

Economic Incentives in a Competitive Market System

How Supply, Demand, and Prices Fluctuate

Changing Resources into Products Resource – anything that people use Natural Resources – resources that occur naturally (trees, air, water, soil, minerals) Human made resources – resources made by humans (money, trucks, factories, machines) Producers rely on resources to turn them into goods and services.

2.1 Review Answer questions 1, 2, 3 on pages 45-46

Trade and Economic Theories

Free Trade and International Competition

Tariffs and Other Trade Barriers

Mercantilism was the dominant economic theory in Europe from 15 th – 18 th centuries (1400s through the 1700s). The idea is that a nation’s economy prospered when it maintained a favorable balance of trade. – They needed to export MORE than they imported.

Mercantilism and Colonialism Mercantilism helped inspire Europe’s age of exploration and early colonial period. – During this time, European nations established colonies in Africa, Asia, and the Americas. – A Colony is a land that a government rules in a foreign territory. – Colonies allowed nations access to more natural resources.

Capitalism Capitalism is a system in which capital is privately owned. Capital refers to nonlabor factors of production (examples: buildings, machines, wagons, ect.) Under capitalism, goods and services are exchanged in competitive markets. Adam Smith is known as the Father of Capitalism

Major Industrial and Agricultural Products of the United States Key U.S. Products and Natural Resources LandThe USA is a large country and provides land resources for agriculture, settlement, metals and places to drill for oil TimberUSA is one of the world’s leading producers of timber FishThe USA borders the Atlantic Ocean, Pacific Ocean, and Gulf of Mexico. As a result, fish is a major natural resource. Animal PeltsThe USA has produced many valuable animal pelts Agricultural ProductsThe USA has large amounts of fertile soul suited for growing different kinds of agricultural products (wheat, corn, peppers, sweet potatoes, squash, pumpkins, peanuts, tomatoes, cotton)

Key Products from Tennessee AgricultureTobacco, cotton, soybeans. Tennessee also has a major cattle industry. Industrial Products Chemicals, transportation equipment, electrical equipment, and textiles. Key IndustriesAutozone FedEx Eastman Chemical Company International Paper The music industry in Nashville and Memphis The health care industry in Nashville

Trade and Economic Theories Review Answer questions 1, 2, 3 on page 51

Key Institutions That Make Up Economic Systems

Business Firms and Corporations

Corporations

Households

Government Agencies The role of the government different from one economic system to another (i.e. USA to China to Cuba). – Governments act as producers. – Governments act as consumers. Governments can also impact the economy by imposing economic regulations.

Government Agencies

Labor Unions

Key Intuitions That Make Up Economic Systems Review Complete questions 1, 2, 3 on page 56 Tomorrow you will have a short, multiple choice assessment on basic economic concepts.