GLOBALIZATION UNIT LESSON 1 GLOBAL ECONOMICS

OBJECTIVES Review economic systems. Introduce key economic terms and theories related to globalization.

WARM UP & REVIEW What is economy? Way in which we manage resources to meet needs What are resources? Human: time, $, skill Country: natural resources, capital, labor force & technology Limited resources = Scarcity

BASIC ECONOMIC SYSTEMS 3 Basic Questions? What to produce? How to produce? For whom to produce? Basic Systems? Traditional Cultural needs, subsistence Command Govt decides, controls Market Free choice, competition MIXED Economics Study of decision- making & resource allocation. Help nations & ppl make informed decisions

THE LAW OF SUPPLY & DEMAND Supply The amt of a certain good or service producers are willing to supply when receiving a certain price Law of Supply: The higher the price, the higher the quantity produced

THE LAW OF SUPPLY & DEMAND Demand How much (quantity) of a product or service people are willing to buy at a certain price Law of Demand: The higher the price, the less demanded

WHAT’S THIS MEAN? Desire equilibrium: At the given price, suppliers sell all the goods they’ve produced & consumers get all the goods they’re demanding. Too much supply, not enough demand = prices drop Too much demand & not enough supply = prices rise “Market fluctuations” Click here for video explanation!video

GLOBAL ECONOMY National decision- making Weigh opportunity cost Value of alternative that must be forgone to pursue certain action Specialization & Comparative Advantage Nation makes certain products at lower cost (higher quality) than others

GLOBAL TRADE Make better product Make cheaper product If can’t make on own = import Exchange rates = more for $ elsewhere Sell to more = make more $ Ease of access to markets

GLOBALIZATION REVIEW What is globalization? Growing integration of the world’s economies and societies. Open country to free trade Open currency markets Privatize business nowledge_global_interdependence_by_marcgosselin-d4l93ph.jpg

GLOBAL IMPACT As global economy becomes more interdependent…  Dvpt depends on wise use of globally scarce resources  Decisions in one location affect all others 480x350-t0blmx.jpg

ACTIVITY Illustrated Global Economic Terms Match up the word from the list of key terms provided with the image that represents its concept.

CLOSURE What factors drive global economic decision making? Resource Scarcity Supply & Demand Opportunity Cost Comparative Advantage

HOMEWORK Choices Reading – International Trade: Competition & Cooperation in a Globalized World Available in classroom

REFERENCES This lesson made possible with the help of investopedia.com!