FOCUS ON THE MAIN IDEA People trade for the goods and services
that they need and want.
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Vocabulary Words 1.need-something that a person must have to
live. 2.want- something that a person would like to have, but can
live without. 3.barter- to trade one kind of goods or services for
another.
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4.producer- people who make goods or products to sell.
5.consumer- a person who buys goods or services. 6.economy- the
resources of a country, state, region, or community and how the
resources are managed.
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7. free enterprise system- a system in which businesses have
the right to produce any good or service that they want. 8.profit-
the money left over after costs are paid. 9.supply- the amount an
item someone has to sell.
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10.demand-the amount of an item that consumers are willing to
pay at different prices. 11.opportunity cost- what is given up when
one thing is chosen over another.
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Trading for Needs and Wants Early in the history of the United
States, people traded for the goods and services that they needed
and wanted. In the early 1800s, St. Louis, Missouri, grew because
people came there to trade for fur.
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In ancient times, people used shells, stones, and round metal
disks as money. A person who was willing to sell something
exchanged that good or service for a certain number of the shells,
stones, or metal disks. In time, however, people relied less on
bartering as a way of trading.
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Using Money The use of money goes back thousands of years.
2,500 B.C., the early Egyptians used tiny bars of metal as money.
700 B.C., Greek cities produced flat pieces of metal with a picture
or design on them. The Chinese came up with the idea of paper money
about 1,400 years ago because they had a shortage of metal. Today
most people use paper money, metal coins, and checks as money.
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REVIEW QUESTIONS 1.Describe a time when you have bartered with
a friend. 2.Tell the difference between a producer and a consumer.
3.Make a list of wants vs needs.
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MONEY IN THE UNITED STATES * The British colonists in America
made their own coins and paper money. They used beads and tobacco
leaves as money. The 1793 copper cent and the 1794 silver dollar
were among the first coins made by the U.S. government. After gold
was discovered in California in 1848, miners used gold dust and
nuggets as money in mining camps. Today, most U.S. coins have the
image of a U.S. president on them. George Washington is on the
quarter, Franklin D. Roosevelt is on the dime, Thomas Jefferson is
on the nickel, and Abraham Lincoln is on the penny.
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FREE TRADE The U.S. economy is based on the free enterprise
system. The government does not tell businesses what they can
produce or sell. People or businesses decide what they want to make
and sell. Not every country in the world has a free enterprise
system. Some governments choose which businesses can provide
certain goods or services. In a free enterprise economy, businesses
operate on a system of supply and demand. If the demand is great
and the supply is low, the price for the product goes up.
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REVIEW QUESTIONS 1. How is an economy based on a free
enterprise system different from one that is not? 2.How might an
increase in supply benefit a customer?
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FACING THE FUTURE We can all contribute to our nations economy.
If you buy something, you are a consumer. Every time you buy
something, you make a contribution to the economy of the U.S. When
you start working, you will help the economy by producing goods or
services.
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THINK ABOUT IT 1.What do you want to do when you grow up?
2.What are some ways that you can prepare yourself for what you
want to do?
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LESSON SUMMARY 1. Goods and services have been traded by barter
and money. 2.Our free enterprise system is based on supply and
demand. 3.You can help the economy when you are a careful producer
and consumer.
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REVIEW QUESTIONS 1.How does a business make a profit? 2.What is
the difference between supply and demand? 3.How were goods and
services traded by barter? 4.How have computers affected the
economy of the United States?
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LINK TO READING Read the story of Jack and the Beanstalk. Tell
your partner what Jack got in return for his mothers cow. Decide if
Jacks trade was a good one or a bad one. Explain why you think
so.