WHY?. The Benefits of Studying ECONOMICS l Helps You to Decide Who to Vote For in an Election l...

The Benefits of Studying ECONOMICS

Helps You to Decide Who to Vote For in an Election

Helps You to Understand Your Boss’ Thinking

Helps You to Make Money Every Day


Helps You to Understand World News

Helps You Participate in the System

Helps You to Spend Your Money Wisely


But Mostly, It Will Also Help You to Under-stand Business & Marketing and, Therefore, Do Better in This Class

HOMEWORK

1. Read Chapter 1, pages 4 – 152. Complete the Crossword Puzzle Provided3. On the Puzzle sheet, answer any two

“Critical Thinking” questions from the text. Use complete sentences. Summarize the question in the first sentence.

OBJECTIVE

Be Able to Define Economics

ECONOMICS

The Process of Making Decisions to Satisfy Unlimited Wants & Needs Using Limited

Resources

ECONOMICS

What the HeckDoes That Mean?The Process of Making

Decisions to Satisfy Unlimited Wants & Needs Using Limited Resources

ECONOMICS

The Process of Making Decisions To Satisfy Unlimited Wants & Needs Using Limited Resources

ECONOMICS

“The Process of Making Decisions To Satisfy Unlimited Wants & Needs Using Limited Resources.”

How could you state this definition more simplistically?

ECONOMICS

Economics is Making Decisions So That I Get the Most for the Least!!!

What Are Your Economic Decisions?

Should I Get Out of Bed in the Morning?

What Classes Should I Take? What Type of Car Should I Buy? What’s For Dinner? Who Should I Vote For?

What Are Your Economic Decisions?

Should I Get Out of Bed in the Morning? What Classes Should I Take? What Type of Car Should I Buy? What’s For Dinner? Who Should I Vote For?

What Job Should I Get ?

Important Economic Concepts

Rewards

Costs

Decisions

Important Economic Concepts

Rewards

Costs

Decisions

Benefits (What I Get Out Of It)

What I Give Up (Resources)

Choices

OBJECTIVE

Be Able to Define:

BenefitsEconomic Resources

HOMEWORK

1. Read Chapter 2, pages 20 – 312. Complete the Crossword Puzzle Provided3. On the Puzzle sheet, answer any two

“Critical Thinking” questions from the text. Use complete sentences. Summarize the question in the first sentence.

Benefits

What a Decision Will Do For Me:

•Make Me $$$

Benefits


•Sense of Relaxation

Benefits


•Joy

Benefits


•Personal Satisfaction

Benefits


•Give Me Confidence

Benefits


•Recognition By My Peers

Economic Resources

LAND

LABOR

CAPITAL&

Economic Resources

LAND Natural Resources

LABOR People with Skills

CAPITAL Money or things . . .

&

QUESTION

How Does a Country Make its Economic

Decisions?

ANSWER

Through the Use of an Economic SysteEconomic Systemm

OBJECTIVE

Be Able to List the Three Basic Economic Questions Every Country’s Economic

System Must Answer

Three Basic Economic Questions

What Should We Produce?

How Should We Produce?

Who Gets What We Produce?

OBJECTIVE

Be Able to List the Three Basic Economic Questions Every Country’s Economic

System Must Answer(On Your Island)

OBJECTIVE

Be Able to Identify the Three Primary Economic Systems

Used in the World Today

Economic Systems of the World

Free Enterprise• Capitalism• Market Economy

Socialism• Mixed Economy• Democratic Socialism

Communism• Planned Economy• Command Economy

OBJECTIVE

Be Able to Describe the Important Characteristics of

Each Type of Economic System

Important Characteristics of All Economic Systems

Allowance for Business Ownership


Production of Consumer Products


The Amount of Competition


• The Amount of Employment Available


• Private Property Rights


• Profit Potential


• Social Services Available

OBJECTIVE

Using the Important Characteristics of All Economics

Systems, Describe Each Economic System

Primary Economic Systems

Ownership ConsumerProducts

Competition Employment PrivateProperty

Profit SocialServices

Communism

Socialism

Free Enterprise

OBJECTIVE

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

Story

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.

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.

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."

QUESTION

What Economic System Do We Use in

This Country?

ANSWER

The Free Enterprise SystemThe Free Enterprise System

Marketing is Part of Our Economic System

MARKETING

OBJECTIVE

Be able to describe the most important facets of a “Free

Enterprise System”

Free Enterprise

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

Free

Enterprise

OBJECTIVE

Be able to identify the freedoms generally allowed in

a free enterprise system

Freedom of Choice

When to Buy When to Sell To Make Profit To Compete To Own Freedom to Decide

OBJECTIVE

Be able to describe & graph the open market using the concepts

of

““Supply & Demand”Supply & Demand”

Define Supply & Demand

Demand:The ability & desire of customers to own products

SupplyProducts/Services available for sale

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.

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.

Tootsie Roll“Demand Schedule”

$ .30

$ .25

$ .20

$ .15

$ .10

$ .05

0 0

2 4 6 8 10 12

Tootsie Roll“Supply Schedule”

$ .30

$ .25

$ .20

$ .15

$ .10

$ .05

0 0

2 4 6 8 10 12

Supply & DemandGraphing

Supply & DemandGraphing Demand

Supply & DemandGraphing Supply

Supply & Demand(Finding the Equilibrium Point)

Supply & Demand(Finding the Equilibrium Point)

At this point I will Max. my profit & have no waste:

Approx. 8 items @ $ .09 each = $ .72

Supply & DemandA Change in Demand

D1D2

Supply & DemandA Change in Demand

D1D2

D3

Supply & DemandA Change in Supply

S2S1

S3

OBJECTIVE

Be able to describe what the terms “buyer’s” and “seller’s”

market mean


Buyer’s Market


Seller’s Market

The Lawsof

“Supply & Demand”

SEE HANDOUT

OBJECTIVE

Be able to define elastic & inelastic demand

Supply & DemandElasticity

S1D1

Inelastic Demand

Supply & DemandElasticity

S1

D1Elastic Demand

ACTIVITY

Complete the Supply and Demand Study Guide

OBJECTIVE

Be able to define the following terms associated with the concept of

PROFIT:Income, Expenses, Costs, Gross Profit,

Net Profit, & Risk

Profit = Incentive

Income - the amount of money a business receives from the sales of its goods/services

Cost - The amount of money a company spends to get product into the store

Expenses - The amount of money a company spends on the operation of the business

Profit = Incentive

Gross Profit - Amount of money made after the cost of goods is subtracted (Income - Cost)

Net Profit - The amount of money made after the cost of goods & expenses are subtracted out (Income - Cost - Expenses)

Risk - The “gamble” a business takes that it might lose money instead of making money

Profit is Good

What Do We Risk?

Our own money The money of other people (friends, relatives,

banks, etc.) Our time & energy that we could spend on a

career Our hopes/dreams (self esteem, inheritance,

freedom, etc.)

OBJECTIVE

Be able to discuss ways a business can increase its profits

Increasing Profits

Increase Sales Increase Efficiency Boost Productivity Raise Prices

OBJECTIVE

Be able to define the types of competition & discuss in a short answer question the

advantages to competition in our economy

Competition

A rivalry between two or more companies to attract scarce (limited) customer dollars

Market Share - A company’s part of the total market for a product

35%

Types of Competition

Direct vs. Indirect

Price vs. Nonprice

No Competition (Monopoly)

MONTH RUSSIA USA KUWAIT IRAN IRAQ SAUDIARABIA

1X Sept1X Oct1X Nov1X Dec2X Jan2X Feb2X Mar5X AprilTOTAL

Benefits of Competition

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

OBJECTIVE

In a matching exercise & short essay, be able to describe the role of government in a

Free Enterprise system

HOMEWORK

1. Read Chapter 11, pages 178 – 1892. Complete the Crossword Puzzle

Provided3. On the Puzzle sheet, answer any one

“Critical Thinking” question from the text. Use complete sentences. Summarize the question in the first sentence.

The Role of Government

Protect Business Property (fire, police, patents)

Enforce Contracts Settle Disagreements Collect & Set Taxes

Its the

Law


Its the

Law

Acts as a Consumer Provides for the Public Good Provides for National Security


Provide for Public Welfare Protect Public Health Regulate/Stabilize Economy Conserve the Environment Protect Consumers Protect Competition Regulate the Workplace

Its the

Law

Government Services

Military Police Fire Protection Education

Infrastructure Postal Libraries Welfare Services

GovernmentalRules & Regulations

Anti-Monopoly Regs.• Sherman Anti-Trust

Act of 1890

• Clayton anti-trust Act of 1914

• Federal Trade Commission (FTC)

Other Acts

• Consumer Product Safety Commission

• Securities/Exchange Commission (SEC)

• Wheeler-Lea Act

• Zoning, Licensing, Building Codes

Rules & Regulations

Worker Protection Rules• Equal Employment

Opportunity Commission

• Occupational Safety & Health Admin. (OSHA)

• Minimum Wage Rules

• Child Labor Laws

Business Protection Rules• Patents

• Copyrights

• Trademarks

Rules & Regulations

Consumer Protection• Robinson-Patman

Act

• Food & Drug Administration (FDA)

Government Taxes

Progressive Taxes

Proportional (Flat) Taxes

Regressive Taxes

Government TaxesMajor Types

Income Taxes

Sales Taxes

Property Taxes

Business Taxes


Income Taxes• Largest income source• Levied against individuals &

business• Based on salaries/income• Allows for “deductions”• Business collects & sends to the

government


Sales Taxes• Levied against sales of

goods/services

• Varies from state to state

• Collected by the business


Property Taxes• Levied against the value

of most personal property

• Levied against individuals & business


Business Taxes• Income (Federal, State, &

Local)

• Personal property

• Payroll

• Social Security

• Unemployment


Business Taxes (cont.):

• Sales taxes

• Corporation taxes

• Business licenses

• Car/truck licenses

• Fees for service

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?”

HOMEWORK

1. Read Chapter 3, pages 36 – 472. Complete the Crossword Puzzle Provided3. On the Puzzle sheet, answer any one


BECAUSE“Its the economy!”

The state of the economy is a major factor in how people vote for public officials

Economic Goals

Low Inflation• 1 - 5% is ideal

• 10% + is painful

• Deflation is bad also Full Employment

• 96% is full

• All 16+ yrs. old & able to work

Economic Goals

Productivity• Found by dividing input (of

resources) by output ($ value) Stable Prices

• For example, between 1965 & 1985, prices increased 300%; wages did not

Economic Measuring Devices

GNP (GNDP)

• Total value of a nation’s products & services in a year:

• Goods exported minus imports

• Consumer goods

• Investment in business

• Government purchases


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


Consumer Price Index• Measures the average price of

400 different normal household products

• Also called the “Cost of Living Index”


Unemployment Figures

• % of workforce out unemployed

OBJECTIVE

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

The Economic Cycle

0

10

20

30

40

50

60

70

80

90

100

GNP

Prosperity

Recession

Depression

Recovery

TIME

The Economic Cycle

Stage/Result

Prosperity Recession Depression Recovery

1

2

3

4

5

Make 2 Large Charts

Prosperity

Lowest Unemployment

Maximum Output Highest Consumer

Spending Possible Inflation

Recession

General Slowdown in the Economy

Unemployment Rising Fewer Good/Services

Being Produced Spending Slows Down

Depression

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

Recovery

Economy Picks Up Unemployment

Decreases Production

Increases Spending Increases

The Economic Cycle

Stage/Action

Prosperity Recession Depression Recovery

1

2

3

4

5

The Economic Cycle

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

Prosperity

Business:

Prosperity

Business:• Invests/Expands

• Hires More People

• Pays More in Taxes

• Maintains Max. Inventories

• Reaps Profits

• Keeps Prices High

Prosperity

Consumers:

The Government

Prosperity

Consumers:• Work• Spend, Spend, Spend• Save Some

The Government• Collects Taxes• Keeps Interest Rates High

Recession

Business:

Recession

Business:• Starts to slow down

production

• Reduces stock

• Cuts back on investments & expansion

• Lays off staff

Recession

Consumers:

The Government

Recession

Consumers:• Spend less & save more

• Protect their jobs more

The Government• Encourages investment by

lowering interest rates

• Might spend more to stimulate the economy

Depression

Business

Depression

Business• Has massive layoffs or

lowers salaries

• Stops spending

• Eliminates stock (sales)

• spends their savings

• Cuts back on quality

• Lowers prices

Depression

Consumers:

Depression

Consumers:• Stop Spending• Spend Their Savings• Convert Wealth to Dollars• Loiter• Open Their Own

Businesses

Depression

The Government:

Depression

The Government:• Lowers interest rates more

• Offers job programs

• Spends more on welfare services

• Spends more to stimulate the economy (?)

• Cheerleads

Recovery

Business:

Recovery

Business:• Does the opposite of a

recession:• Hires• Spends more• Invests• Produces• Risks more

Recovery

Consumers:

The Government:

Recovery

Consumers:• Spend more

• Save less

The Government:• Collects more tax money

• Raises interest rates

• Spends more (?)

The Economic Cycle

TIME

GNP

OBJECTIVE

Be able to define the terms associated with international trade

HOMEWORK

1. Read Chapter 10, pages 162 – 1732. Complete the Crossword Puzzle Provided3. On the Puzzle sheet, answer any one


International Trade

Imports - Goods & services brought into the country

Exports - Goods & services sent out of the country

Balance of Trade - The difference between a country’s imports & exports

International Trade

Tariff - A tax put on goods & services brought into a country

Quota - A limit on the number of goods & services that can be brought into a country

International Trade

Embargo - The banning of sales of goods & services from a specific country.

Thus Endth the Economics Unit

Yippee!!


• The Amount of Employment Available

• Private Property Rights

• Profit Potential

• Social Services Available

WHY?. The Benefits of Studying ECONOMICS l Helps You to Decide Who to Vote For in an Election l...

Documents

Transcript of WHY?. The Benefits of Studying ECONOMICS l Helps You to Decide Who to Vote For in an Election l...