1. INTRODUCTION TO ECONOMICS
SS6E1/SS6E5/SS6E8 The student will analyze different economic systems.
SS6E2/SS6E9 The student will analyze the benefits and barriers to voluntary trade.
SS6E3/SS6E7/SS6E10 The student will describe factors that cause economic growth.
SS6E4 The student will explain personal money management choices in terms of income, spending, saving, credit and investing.
INTRODUCTION TO ECONOMICS

2. ELEMENTS
Compare how traditional, command, and market economies answer the economic questions of (1) what to produce, (2) how to produce, and (3) for whom to produce.
Explain how most countries have a mixed economy located on a continuum between pure market and pure command.
Explain how specialization encourages trade between countries.
Compare and contrast different types of trade barriers, such as tariffs, quotas, and embargos
Explain the relationship between investment in human capital (education and training) and gross domestic product (GDP).
Explain the relationship between investment in capital (factories, machinery, and technology) and gross domestic product (GDP).
Explain the role of natural resources in a country’s economy.
Describe the role of entrepreneurship.

3. ENDURING UNDERSTANDINGS
Location: The student will understand that location affects a society’s economy, culture, and development.
Production, Distribution, Consumption: The student will understand that the production, distribution, and consumption of goods/services produced by the society are affected by the location, customs, beliefs, and laws of the society.

4. What is an Economic System?
Every society, whether a country, state, city, town, has an economic system.
An economic system is how a society organizes the production, consumption and distribution of goods and services.
Consumption - The using up of goods and services by consumer purchasing or in the production of other goods.
Distribution - The process of marketing and supplying goods, especially to retailers and market economics, but falls closer to one form or the other.
Production - The creation or manufacture for sale of goods and services with exchange value.

5. Systems of Economy There are three main types of economic systems
Traditional - An economy in which customs and habits of the past decide what and how goods are produced, distributed and consumed.
Found mostly in societies that are based on farming
People produce enough goods to survive
Either by farming, gathering or hunting
Make their own clothes and tools
Anything extra is usually traded
Command - An economy in which centralized planning groups decide what and how goods and services will be produced, distributed and consumed.
Government controls what is produced, how things are produced
Government has all the resources and dictates what is to be made and who gets the product
Decisions made on wealth, class status or by position in a waiting line
Market - An economy in which changes in price guide what and how goods and services will be produced, distributed and consumed.
Based on what the consumers of the country want to buy and sell
Supply and demand determines what is produced and how it is produced
People may own their own businesses
Who gets a product determines how much they can afford to buy it

6. Countries with Different Systems
NORTH KOREA
PAKISTAN
UNITED STATES OF AMERICA

7. The Idea of Mixed Economy
Definition - Most counAn economy that blends characteristics of both command and market economics, but falls closer to one form or the other.
tries in the world have a mixed economy
Because of growing populations, citizens acquiring more rights, the addition of resources and government changes, countries have moved towards mixed economies
Examples of countries with mixed economies
United States
England
France
South Africa

8. Specialization
Definition – The division of labor; work is divided into parts for workers, factories, or countries to become experts on producing certain goods.
Helps people and companies use resources more efficiently
Allows for increased production and consumption of goods and services

9. Types of Trade Barriers
Tariffs
Taxes on imported goods
Quotas
A limit placed on the number of imports that may enter a country
Embargos
A government order stopping trade with another country to put pressure on the government of that other country

10. Capital and Human Capital vs. GDP
Definition - Workers of a business or country including their education, training, skills and health
Factors include training and education
Capital
Definition - Wealth available for or capable of use in the production of further wealth
Factors include factories, technology and machines
Gross Domestic Product (GDP)
Definition - The total value of all goods and services produced in a country in one year
Used by economists to determine how healthy or unhealthy a country is

11. Human Capital, Capital and GDP
The relationship between human capital and GDP is if a country has good source of human capital, the GDP tends to be higher
The relationship between capital and GDP is the more capital in a country, the healthier the country is in the long term

12. The Impact of Natural Resources
A natural resource is something that is found in nature that is necessary or useful to humans
Natural resources allow for goods and services to be produced.
Examples of natural resources:
Oil
Petroleum
Lumber
Diamonds
Water
Fruits and Vegetables
Iron
Aluminum
Natural Gas
Gold
Platinum

13. Entrepreneurship
An entrepreneur is one who risks his or her own money, time, ideas, and energy to start and run a business.
Entrepreneurs know of the risks before the product is produced
Entrepreneurs help the economy to grow based on borrowing funds, use capital and human capital and natural resources

14. What is Money Management?
Money management deals with the choices you make in your life in terms of what you are doing with your money.
Money is the medium of exchange used for goods and services

15. Terms of Personal Finance
INCOME
Definition – Money coming in to a person or into a business
Can come from various forms
Salary, Borrowing, Finding it, Investments
SAVING
Definition – Income not spent
SPENDING
Definition – To pay out or expend money
INVESTING
Definition - Putting money into a bank account, stock, bond, or mutual fund that pays interest.
This allows your money to be saved

16. WHAT IS CREDIT?
Credit is an arrangement for deferred payment of a loan or purchase.
You must pay back the amount borrowed, plus interest
The money for credit is supplied by a bank or a credit company

17. DIFFERENCES OF MONEY AND CREDIT
TYPES OF MONEY
TYPES OF CREDIT
Coins
Paper Bills
Checks
Debit Cards
Credit Cards
Bank Loans

19. WHY SAVE?
Saving allows you to have money aside for emergencies as well as having money for future use
There are many different ways to save
Hands on saving
Putting money in a shoebox, jar, etc
Savings accounts
Usually with your bank
Retirement accounts
Usually with your job
401K or CD plans