ECONOMICS!

Which costs more, diamonds or gravel? Warm-up: In your notes How much do superstar professional athletes make compared to average players? Do you think you’d pay more for a 1962 Corvette or a 2015 Corvette (assuming that both are in good condition)? Which costs more, diamonds or gravel? Why do you think some of these things are more expensive than others? Be ready to discuss with a partner.

Vocabulary SUPPLY: The total amount of a good or service available for purchase DEMAND: The willingness and ability of the people within a market area to purchase particular amounts of goods or services at a variety of alternative prices during a specified time period LAW of SUPPLY and DEMAND: The price of an item will go down if the supply increases or if the demand for the item decreases. The price of an item will go up if the supply decreases or if the demand for the item increases. In general, the price of an item is usually pushed toward the level at which the quantity supplied will equal the quantity demanded.

How does this influence jobs? www.bls.gov/ooh So what?? What effect do you think supply and demand have on your life? Write down one way you think supply and demand have affected you. How does this influence jobs? www.bls.gov/ooh

Warm-up: In your notes Make a hypothesis—What can you use to determine the size and strength of a country’s economy?

Gross domestic Product (GDP) Gross domestic product is the total market value of all final goods and services produced within the borders of a country in one year

What is a Final good or Service What is a Final good or Service? What is an Intermediate good or service? Cloth for making dresses Manicures Bread Window glass in new automobiles Cruise missile New factory Screws used in a cruise missile Dresses Increase in automobile inventory Lumber in a new house Flour for making bread

Three components Consumer = family (household) spending on consumer goods and services Government = government purchases of goods and services Investment = spending by firms and households on new capital such as factories, tools, inventory increases or decreases, and new houses

C+G+I=GDP Example: %=part /whole * 100 Populations: Anchovia-10,000 How do you find GDP?? C+G+I=GDP Example: %=part /whole * 100 Populations: Anchovia-10,000 Pepperonia-50,000

Which country would you move to? Why? Anchovia v. Pepperonia Which country would you move to? Why? Pepperonia: GDP = 150,000 parms where C = 100,000 parms (66%); G = 25,000 parms (17%); I = 25,000 parms (17%) Anchovia: GDP = 75,000 parms where C = 37,500 parms (50%); G = 30,000 parms (40%); I = 7,500 parms (10%)

Circular Flow in a Market Economy Warm-up: How would you describe the economy of the United States? Why do you think it is the way it is?

Create your own Circular Flow Diagram Think about various exchanges in the circular flow that you or your family takes part in. Where do those exchanges fit on the circular flow. With real-life examples, create your own circular flow diagram.

Reflection questions – on the back How does the circular flow model illustrate the flow of money in the economy? How does each actor stimulate the economy?