1. WHY?

2. The Benefits of Studying ECONOMICS l Helps You to Decide Who to Vote For in an Election l Helps You to Understand Your Boss’ Thinking l Helps You to Make Money Every Day

3. The Benefits of Studying ECONOMICS l Helps You to Understand World News l Helps You Participate in the System l Helps You to Spend Your Money Wisely

4. The Benefits of Studying ECONOMICS l But Mostly, It Will Also Help You to Under- stand Business & Marketing and, Therefore, Do Better in This Class

5. HOMEWORK 1. Read Chapter 1, pages 4 – 15 2. Complete the Crossword Puzzle Provided 3. On the Puzzle sheet, answer any two “Critical Thinking” questions from the text. Use complete sentences. Summarize the question in the first sentence.

6. OBJECTIVE Be Able to Define Economics

7. ECONOMICS The Process of Making Decisions to Satisfy Unlimited Wants & Needs Using Limited Resources

8. ECONOMICS What the Heck Does That Mean? The Process of Making Decisions to Satisfy Unlimited Wants & Needs Using Limited Resources

9. ECONOMICS l The Process of l Making Decisions l To Satisfy l Unlimited Wants & Needs l Using Limited Resources

10. ECONOMICS l The Process of l Making Decisions l To Satisfy l Unlimited Wants & Needs l Using Limited Resources

11. ECONOMICS l The Process of l Making Decisions l To Satisfy l Unlimited Wants & Needs l Using Limited Resources

12. ECONOMICS l The Process of l Making Decisions l To Satisfy l Unlimited Wants & Needs l Using Limited Resources

13. ECONOMICS l The Process of l Making Decisions l To Satisfy l Unlimited Wants & Needs l Using Limited Resources

14. ECONOMICS l “ The Process of Making Decisions To Satisfy Unlimited Wants & Needs Using Limited Resources.”  How could you state this definition more simplistically?

15. ECONOMICS l Economics is Making Decisions So That I Get the Most for the Least!!!

16. What Are Your Economic Decisions? l Should I Get Out of Bed in the Morning? l What Classes Should I Take? l What Type of Car Should I Buy? l What’s For Dinner? l Who Should I Vote For?

17. What Are Your Economic Decisions? l Should I Get Out of Bed in the Morning? l What Classes Should I Take? l What Type of Car Should I Buy? l What’s For Dinner? l Who Should I Vote For? l What Job Should I Get ?

18. Important Economic Concepts l Rewards l Costs l Decisions

19. Important Economic Concepts l Rewards l Costs l Decisions Benefits (What I Get Out Of It) What I Give Up (Resources) Choices

20. OBJECTIVE Be Able to Define: Benefits Economic Resources

21. HOMEWORK 1. Read Chapter 2, pages 20 – 31 2. Complete the Crossword Puzzle Provided 3. On the Puzzle sheet, answer any two “Critical Thinking” questions from the text. Use complete sentences. Summarize the question in the first sentence.

22. Benefits l What a Decision Will Do For Me: Make Me $$$

23. Benefits l What a Decision Will Do For Me: Sense of Relaxation

24. Benefits l What a Decision Will Do For Me: Joy

25. Benefits l What a Decision Will Do For Me: Personal Satisfaction

26. Benefits l What a Decision Will Do For Me: Give Me Confidence

27. Benefits l What a Decision Will Do For Me: Recognition By My Peers

28. Economic Resources LAND LABOR CAPITAL &

29. Economic Resources LAND Natural Resources LABOR People with Skills CAPITAL Money or things... &

30. QUESTION How Does a Country Make its Economic Decisions?

31. ANSWER Economic Syste m Through the Use of an Economic Syste m

32. OBJECTIVE Be Able to List the Three Basic Economic Questions Every Country’s Economic System Must Answer

33. Three Basic Economic Questions l What Should We Produce? l How Should We Produce? l Who Gets What We Produce?

34. OBJECTIVE Be Able to List the Three Basic Economic Questions Every Country’s Economic System Must Answer (On Your Island)

35. OBJECTIVE Be Able to Identify the Three Primary Economic Systems Used in the World Today

36. Economic Systems of the World l Free Enterprise Capitalism Market Economy l Socialism Mixed Economy Democratic Socialism l Communism Planned Economy Command Economy

37. OBJECTIVE Be Able to Describe the Important Characteristics of Each Type of Economic System

38. Important Characteristics of All Economic Systems l Allowance for Business Ownership

39. Important Characteristics of All Economic Systems l Production of Consumer Products

40. Important Characteristics of All Economic Systems l The Amount of Competition

41. Important Characteristics of All Economic Systems The Amount of Employment Available

42. Important Characteristics of All Economic Systems Private Property Rights

43. Important Characteristics of All Economic Systems Profit Potential

44. Important Characteristics of All Economic Systems Social Services Available

45. OBJECTIVE Using the Important Characteristics of All Economics Systems, Describe Each Economic System

46. Primary Economic Systems

47. OBJECTIVE Be able to identify two advantages & two disadvantages of each economic system

48. Story l A Lesson on Socialism "An economics professor said he had never failed a single student before but had, once, failed an entire class. The class had insisted that socialism worked - and that no one would be poor and no one would be rich, a great equalizer for all, for society. The professor then said ok, we will have an experiment in this class on socialism. l He said that all grades would be averaged and everyone would receive the same grade so no one would fail and no one would receive an A. After the first test the grades were averaged and everyone was given a B. The students who studied hard were upset, and the students who studied little were happy. But, as the second test rolled around, the students who hadn't studied much for the first test had studied even less, and the ones who studied hard weren't motivated to study hard again, and they decided they wanted a free ride too; so they studied little. The second Test average was a D! No one was happy. When the 3rd test rolled around the average was an F. l The scores never increased as bickering, blame, name calling all resulted in hard feelings and no one would study for anyone else. All failed.... and the professor told them that the socialism they wanted would ultimately fail, as they had, because the reward of success normally goes to those that work harder, but when government takes the reward away; few will try so no one will succeed."

49. QUESTION What Economic System Do We Use in This Country?

50. ANSWER The Free Enterprise System

51. Marketing is Part of Our Economic System MARKETING

52. OBJECTIVE Be able to describe the most important facets of a “Free Enterprise System”

53. Free Enterprise l Freedom of Choice l The Profit Motive l Competition l Open Mkt. (S & D) l Limit Gov. Control Free Enterprise

54. OBJECTIVE Be able to identify the freedoms generally allowed in a free enterprise system

55. Freedom of Choice l When to Buy l When to Sell l To Make Profit l To Compete l To Own l Freedom to Decide

56. OBJECTIVE Be able to describe & graph the open market using the concepts of “Supply & Demand”

57. Define Supply & Demand l Demand: The ability & desire of customers to own products l Supply Products/Services available for sale

58. ACTIVITY “The Tootsie Roll Game” 1.) Offer ten tootsie rolls for sale starting at a high price & working down, graph results. Then give the tootsie rolls to a student to keep, but ask at what price they may be willing to make some available for sale; graph the results.

59. Tootsie Roll “Demand Schedule”

60. Tootsie Roll “Supply Schedule”

61. Supply & Demand Graphing

63. Supply & Demand Graphing Demand

64. Supply & Demand Graphing Supply

65. Supply & Demand (Finding the Equilibrium Point)

66. At this point I will Max. my profit & have no waste: Approx. 8 items @ $.09 each = $.72

67. Supply & Demand A Change in Demand D1 D2

68. Supply & Demand A Change in Demand D1 D2 D3

69. Supply & Demand A Change in Supply S2 S1 S3

70. OBJECTIVE Be able to describe what the terms “buyer’s” and “seller’s” market mean

71. Supply & Demand Graphing Buyer’s Market

72. Supply & Demand Graphing Seller’s Market

73. The Laws of “Supply & Demand” SEE HANDOUT

74. OBJECTIVE Be able to define elastic & inelastic demand

75. Supply & Demand Elasticity S1 D1 Inelastic Demand

76. Supply & Demand Elasticity S1 D1 Elastic Demand

77. ACTIVITY Complete the Supply and Demand Study Guide

78. OBJECTIVE Be able to define the following terms associated with the concept of PROFIT: Income, Expenses, Costs, Gross Profit, Net Profit, & Risk

79. Profit = Incentive l Income - the amount of money a business receives from the sales of its goods/services l Cost - The amount of money a company spends to get product into the store l Expenses - The amount of money a company spends on the operation of the business

80. Profit = Incentive l Gross Profit - Amount of money made after the cost of goods is subtracted (Income - Cost) l Net Profit - The amount of money made after the cost of goods & expenses are subtracted out (Income - Cost - Expenses) l Risk - The “gamble” a business takes that it might lose money instead of making money

81. Profit is Good

82. What Do We Risk? l Our own money l The money of other people (friends, relatives, banks, etc.) l Our time & energy that we could spend on a career l Our hopes/dreams (self esteem, inheritance, freedom, etc.)

83. OBJECTIVE Be able to discuss ways a business can increase its profits

84. Increasing Profits l Increase Sales l Increase Efficiency l Boost Productivity l Raise Prices

85. OBJECTIVE Be able to define the types of competition & discuss in a short answer question the advantages to competition in our economy

86. Competition l A rivalry between two or more companies to attract scarce (limited) customer dollars l Market Share - A company’s part of the total market for a product 35%

87. Types of Competition l Direct vs. Indirect l Price vs. Nonprice l No Competition (Monopoly)

89. Benefits of Competition l New Products & Services l Variety of Products/ Services l Lower Prices l Better Customer Service l Higher Quality Merchandise l More Information Provided l Etc.

90. OBJECTIVE In a matching exercise & short essay, be able to describe the role of government in a Free Enterprise system

91. HOMEWORK 1. Read Chapter 11, pages 178 – 189 2. Complete the Crossword Puzzle Provided 3. On the Puzzle sheet, answer any one “Critical Thinking” question from the text. Use complete sentences. Summarize the question in the first sentence.

92. The Role of Government l Protect Business Property (fire, police, patents) l Enforce Contracts l Settle Disagreements l Collect & Set Taxes Its the Law

93. The Role of Government Its the Law l Acts as a Consumer l Provides for the Public Good l Provides for National Security

94. The Role of Government l Provide for Public Welfare l Protect Public Health l Regulate/Stabilize Economy l Conserve the Environment l Protect Consumers l Protect Competition l Regulate the Workplace Its the Law

95. Government Services l Military l Police l Fire Protection l Education l Infrastructure l Postal l Libraries l Welfare Services

96. Governmental Rules & Regulations l Anti-Monopoly Regs. Sherman Anti-Trust Act of 1890 Clayton anti-trust Act of 1914 Federal Trade Commission (FTC) l Other Acts Consumer Product Safety Commission Securities/Exchange Commission (SEC) Wheeler-Lea Act Zoning, Licensing, Building Codes

97. Rules & Regulations l Worker Protection Rules Equal Employment Opportunity Commission Occupational Safety & Health Admin. (OSHA) Minimum Wage Rules Child Labor Laws l Business Protection Rules Patents Copyrights Trademarks

98. Rules & Regulations l Consumer Protection Robinson-Patman Act Food & Drug Administration (FDA)

99. Government Taxes l Progressive Taxes l Proportional (Flat) Taxes l Regressive Taxes

100. Government Taxes Major Types l Income Taxes l Sales Taxes l Property Taxes l Business Taxes

101. Government Taxes Major Types l Income Taxes Largest income source Levied against individuals & business Based on salaries/income Allows for “deductions” Business collects & sends to the government

102. Government Taxes Major Types l Sales Taxes Levied against sales of goods/services Varies from state to state Collected by the business

103. Government Taxes Major Types l Property Taxes Levied against the value of most personal property Levied against individuals & business

104. Government Taxes Major Types l Business Taxes Income (Federal, State, & Local) Personal property Payroll Social Security Unemployment

105. Government Taxes Major Types l Business Taxes (cont.): Sales taxes Corporation taxes Business licenses Car/truck licenses Fees for service

106. OBJECTIVE Be able to describe the official measures of an economy’s health or, in other words, “How do we know if the economy is doing well?”

107. HOMEWORK 1. Read Chapter 3, pages 36 – 47 2. Complete the Crossword Puzzle Provided 3. On the Puzzle sheet, answer any one “Critical Thinking” question from the text. Use complete sentences. Summarize the question in the first sentence.

108. WHY?

109. BECAUSE “Its the economy!” l The state of the economy is a major factor in how people vote for public officials

110. Economic Goals l Low Inflation 1 - 5% is ideal 10% + is painful Deflation is bad also l Full Employment 96% is full All 16+ yrs. old & able to work

111. Economic Goals l Productivity Found by dividing input (of resources) by output ($ value) l Stable Prices For example, between 1965 & 1985, prices increased 300%; wages did not

112. Economic Measuring Devices l GNP (GNDP) Total value of a nation’s products & services in a year: Goods exported minus imports Consumer goods Investment in business Government purchases

113. Economic Measuring Devices Standard of Living: Measure of the value of goods & services people have: Divide GNP by population For example, one year, GNP was $4,235,000,000,000 & the population was 240 million. Therefore, the Standard of living was $17,646

114. Economic Measuring Devices l Consumer Price Index Measures the average price of 400 different normal household products Also called the “Cost of Living Index”

115. Economic Measuring Devices l Unemployment Figures % of workforce out unemployed

116. OBJECTIVE Be able to describe the “economic cycle” and what factors influence its fluctuations

117. The Economic Cycle GNP Prosperity Recession Depression Recovery TIME

118. The Economic Cycle Make 2 Large Charts

119. Prosperity l Lowest Unemployment l Maximum Output l Highest Consumer Spending l Possible Inflation

120. Recession l General Slowdown in the Economy l Unemployment Rising l Fewer Good/Services Being Produced l Spending Slows Down

121. Depression l Prolonged Recession l Lowest Amount of Spending l Highest Unemployment l Production is at its Lowest l Tax Collection is Down l Possible Deflation l Poverty Occurs

122. Recovery l Economy Picks Up l Unemployment Decreases l Production Increases l Spending Increases

123. The Economic Cycle

124. l What would you do if you were a ________ during a ________ business cycle?

125. Prosperity l Business:

126. Prosperity l Business: Invests/Expands Hires More People Pays More in Taxes Maintains Max. Inventories Reaps Profits Keeps Prices High

127. Prosperity l Consumers: l The Government

128. Prosperity l Consumers: Work Spend, Spend, Spend Save Some l The Government Collects Taxes Keeps Interest Rates High

129. Recession l Business:

130. Recession l Business: Starts to slow down production Reduces stock Cuts back on investments & expansion Lays off staff

131. Recession l Consumers: l The Government

132. Recession l Consumers: Spend less & save more Protect their jobs more l The Government Encourages investment by lowering interest rates Might spend more to stimulate the economy

133. Depression l Business

134. Depression l Business Has massive layoffs or lowers salaries Stops spending Eliminates stock (sales) spends their savings Cuts back on quality Lowers prices

135. Depression l Consumers:

136. Depression l Consumers: Stop Spending Spend Their Savings Convert Wealth to Dollars Loiter Open Their Own Businesses

137. Depression The Government:

138. Depression The Government: Lowers interest rates more Offers job programs Spends more on welfare services Spends more to stimulate the economy (?) Cheerleads

139. Recovery Business:

140. Recovery Business: Does the opposite of a recession: Hires Spends more Invests Produces Risks more

141. Recovery l Consumers: l The Government:

142. Recovery l Consumers: Spend more Save less l The Government: Collects more tax money Raises interest rates Spends more (?)

143. The Economic Cycle TIME GNP

144. OBJECTIVE Be able to define the terms associated with international trade

145. HOMEWORK 1. Read Chapter 10, pages 162 – 173 2. Complete the Crossword Puzzle Provided 3. On the Puzzle sheet, answer any one “Critical Thinking” question from the text. Use complete sentences. Summarize the question in the first sentence.

146. International Trade l Imports - Goods & services brought into the country l Exports - Goods & services sent out of the country l Balance of Trade - The difference between a country’s imports & exports

147. International Trade l Tariff - A tax put on goods & services brought into a country l Quota - A limit on the number of goods & services that can be brought into a country

148. International Trade l Embargo - The banning of sales of goods & services from a specific country.

149. Thus Endth the Economics Unit Yippee!!

150. Important Characteristics of All Economic Systems The Amount of Employment Available Private Property Rights Profit Potential Social Services Available