Today’s Notes: Economic Systems
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Transcript of Today’s Notes: Economic Systems
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Today’s Notes: Economic SystemsAWESOME IDEA FOR FRIDAY:
Friday we’ll have our “quest” for our economics unit followed by a participation grade – a Pollyanna.
We can’t do an auction b/c you can’t buy stuff in here with your $$....HOWEVER… we can definitely have fun with
this!
Supply & DemandScarcityWants & NeedsTime ManagementPersonal PreferenceFree-Market Systems“Chance” associated with the stock market
…much more!
What YOU need to do…Bring in an item between $1-5 for Friday.
I’ll have a box in here if you want to do it ahead of time – make sure it’s labeled with your
name (don’t write on the item).Participation grade! (don’t get something from
lunch like a cookie or soda… do it right!)
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Notes: Economic SystemsEconomic System: way in which
a nation uses its resources to satisfy its people’s needs &
wants
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Oligopoly:
A market structure where a few companies control the factors of production in an industry
From last year, what is it called when one companycontrols the factors ofproduction in an industry?
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Recapping From 9th Grade…
What is a bull
market?
What is a bear
market?
http://www.youtube.com/watch?v=1xAQLlvEIoQ
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Bears & BullsBear Market: a general decline in the stock market over a period of time; A transition from high optimism to widespread pessimism.
Bull Market: when stock prices have increased for an extended period of time. If an investor is "bullish" they believe a particular company, industry, sector, or market in
general is going to go up.
So… you want to invest during a bear market because stock prices are lower & have the potential or expectancy to grow
For both of these, think long term versus short term.
Create a memory device & choose a way to remember these! You’ll see
them again in college
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Remember This Guy?...Make Sure You’re Clear:• The idea of “Laissez-
Faire” is what Smith promoted…
• The result was Capitalism: a market system where the means of production are privately owned
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“In my book, The Wealth of Nations….
I talk all about how a more laissez-faire style of
government would allow for the little man to
improve his life via hard work.
I propose a free market system – one that would
shine a light on the motivations of private
ownership with very limited governmental
involvement”- Adam Smith
In other words….A. Smith
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Free Market: goods & services are exchanged with little regulation
So… what does this mean?
Free Enterprise System: businesses are owned by private citizens who decide WHAT to produce, HOW MUCH to produce & what PRICES to charge.
So… what does that mean?
Recapping From 9th Grade…
When you take notes… are you writing down what I have up here OR are you writing it down so that it makes sense to you NOW and LATER?...
(which one should you probably do)
That’s what’s up!
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The 3 Basic Economic Questions
Every society (rich & poor) must answer 3 basic economic questions about the goods & services
people want:
1. What will be produced?
2. How will it be produced?
3. For whom will it be
produced?
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What should be Produced?
• If the gov’t decides to use resources to build new roads, fewer resources are available to maintain national parks
• More police officers hired = fewer funds for teachers in the classroom
• Automobile manufacturer needs to decide what kinds of vehicles to make/ how much of each
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How should it be produced?
• How many people to hire• Skilled ($$$) or unskilled ($) laborers• Will technology be used?• *What is the best combination of available inputs
to get the job done for the lowest possible cost?
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For whom should it be produced?
• After goods/ services are produced, the type of economic system that people live in determines how things will be distributed
• Who receives what?• Who gets the new/ old schools/ buildings?– In the U.S. distribution is based on a price system --- you get
what you can afford/ pay for
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http://www.youtube.com/watch?v=M5uYCWVfuPQ BEHIND THE SWOOSH!
Raise your hand If you’re wearing Nike right now…
If you own anything Nike?...