Chapter 3.1. 0422.9.4Identify the resources (factors of production) that are used to satisfy wants...
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Transcript of Chapter 3.1. 0422.9.4Identify the resources (factors of production) that are used to satisfy wants...
Chapter 3.1
0422.9.4 Identify the resources (factors of production) that are used to satisfy wants and needs.
0422.9.5 Explain how scarcity affects the availability of economic goods and services.
0422.9.9 Explain what an economy is. 0422.9.10 Discuss advantages and disadvantages of
different types of economic systems. 0422.9.11 Discuss how an economic system addresses the
questions (what is to be produced, how it is to be produced, and for whom).
The organized way a nation provides for the needs and wants of its people
How a nation uses its resources
All the things used to produce goods and services
LandLaborCapitalEntrepreneurship
1. LandEverything contained in the earth or
found in the seasCoal ClimateCrude Oil GeographyFishTrees and Plants
2. LaborAll people who work
Full-time and part-timeWell-educatedWell-trained
3. CapitalMoney to start and operate a
businessGoods used in productionBuildings and factoriesTools and computersRaw materials that have been
processed into more useful form Infrastructure
The physical development of a country
Roads and PortsSanitation and UtilitiesTelecommunications
4. EntrepreneurshipThe skills of people who are willing to
invest time and money to run a business
Organize factors of production to create goods and services
Employers
List one of each type of resource that is used in the production of the following goods and services.
Automobiles Land Labor Capital
Potted plants Land Labor Capital
Hair Cut Land Labor Capital
Automobiles Land – ore to produce steel for auto
frames Labor – production line workers Capital – production line robots
Potted plants Land – potting soil Labor –nursery employees/gardeners Capital -- greenhouses
Hair Cut Land –salon/shop site Labor – hairdresser/barber Capital – scissors, combs, hairdryers
Which resource – land, labor or capital is the most important to a nation’s economic success? Explain the reasons for your choice.
The difference between the wants and needs and available recourses
Unlimited wants and needs for growth and development
Limited resourcesForces Nations to make Choices
What or Which goods and services should be produced?
How should the goods and services be produced?
For whom should the goods and services be produced?
Traditional EconomyTraditions and rituals answer the
basic questionsAnswers often based on cultural or
religious practices and ideals that are passed from generation to generation
Market Economy or Free Enterprise System
No government involvement in economic decisions
What to produce? – Consumers decide How to produce? –
Business/competitive For whom to produce? – people with
money
Command EconomyThe government makes economic
decisionsWhat to produce? – dictator or
central government decidesHow to produce? – government owns
means of productionFor whom to produce? – government
decides
Mixed Economies – no pure traditional, market or command economies
United States – mixed economy leaning toward market economy
Government involvement through laws and regulations Protect food, air and water, unsafe
products Labor laws – age and minimum wage Social programs – welfare and Medicaid
Profit is the driving force in a market economy.
What element takes the place of profit in a command economy?
How well does this alternative work?
Make a T-Graphic for each political philosophy (Capitalism, Communism and Socialism)
One side of the graphic will list the advantage of the political philosophy
The other side of the graphic will list the disadvantages of the political philosophy
CapitalismAssociate with democracyPolitical power in hands of peopleMore than one political partyFree to elect candidatesMotive for producing goods and
services is to sell them for a profitUnited States and Japan
CommunismAuthoritarian government controls
factors of productionNo private ownership of property or
capitalTheory – goods owned in common
(by government) are available to all as needed and society is classless
No unemployment – assigned jobsGovernment decided education
neededHousing assigned as neededFood & housing prices subsided to
keep lowMedical care is free
No financial incentive to increase productivity
Food shortagesSubstandard medical careCuba, North Korea, China
China allowing more free enterprise practices
SocialismSystem on its way to the communist
ideal of a classless societyToday most have democratic
political institutionsMain Goal: meet basic needs for all
and to provide employment for many
Cradle to GraveMedical Care and Education is free or
low costPension system and elderly careBusinesses and individuals pay high
taxesGovernment runs key industriesCanada and Sweden
Privatization – government selling state owned businesses
InfrastructureEducated labor forceForeign investments
Political power in hands of peopleFree elections/free to elect candidate
of your choice/you can run for office More than one political partyProfit is the motive for
business/productivity
UnemploymentNo guaranteed pensions Medical costs not subsidizedEducation costs not subsidized
Free medical careFree educationSubsidized housing costsSubsidized food costsNo unemployment
No private ownership of property No productivity incentive Government often assigns jobs Government controls factors of
production Substandard medical care Food shortages Government decides education needs Government decides housing needs
Designed to meet basic needs of citizens
Designed to provide employment to all
Medical care is free or low costEducation is free or low costElderly Care (Cradle to Grave
coverage)Pension system
Services paid for by high taxes on individuals and businesses
Government runs key industriesHealth care can have long waiting
lists
Explain why the United States economy is considered a mixed economy.