Pirate Economics Thought Questions Role of Markets SS.11.8.3 - Describe how the determinants of SUPPLY affect the price and availability of goods and services SS.11.8.4 - Describe how the determinants of DEMAND affect the price and availability of goods and services Thought Questions Why were Europeans motivated to find new trade routes to Asia? How did pirates affect the economies of Europe and their colonies?

What we are going to learn today What is a Market Imports and Exports Price v. Availability Supply and Demand Profit/Loss How things effect economics, like Technology Number Sellers Government Regulations

Consumers = Buyers Producers = Sellers What is a Market The world of commercial activity where goods and services are bought and sold Consumers = Buyers Producers = Sellers

Opening Markets in Asia Tariffs T

Imports and Exports *Trading* Exports (exit) Things that are shipped out of a place Imports (into) Things that are brought into a place Balance of Trade The amount of wealth generated from your exports compared to the amount you spend on imports What does Maui Import? What does Maui Export? How does the balance of Imports and Exports affect Hawaii?

Imports and Exports Europe and the Americas From Asia Pocelain New markets in Asia & the Americas brought new goods to European markets And provided new consumers of European goods Spices

Spice Trade Tariffs T

Fur Trade Animal pelts were big business Known as “Soft Gold” Pelts from Beavers, Otters, seals and other cold weather animals

Slave Trade Tariffs T

Slave Trade

Major Cash Crops that drove the Slave trade

Biggest Silver reserves came from the Americas and Japan Silver Trade Biggest Silver reserves came from the Americas and Japan

Mercantilism & Colonies Countries try to make profits off of a positive balance of trade Colonies increased a counties exports Hoard precious resources like gold and silver More colonies meant more profits could be made through trade r

Supply and Demand Supply Demand Indicator for Producers $$$$$ $$$$ $$$ $$ $ ####### ##### ### # Supply How much of a good or service is produced Demand How many people want a good or service Indicator for Producers How much they should produce and how much they should sell for

Change in Supply Supply goes up Supply goes down and demand stays the same producers have to sell for less price to get rid of lager supply $$$$$ $$$$ $$$ $$ $ ####### ##### ### # Supply Down Supply Up Supply goes down And demand stays the same producers can sell for higher prices because less people have the product therefore the demand would be higher

Change in Supply Pirates affect the Supply by stealing all the Rum Rum gets shipped from a port in the Caribbean to Europe What happens to the price of Rum in Europe? Pirates affect the Supply by stealing all the Rum

Change in Supply Silver is the 1st global currency Spanish discover huge amounts of silver in Bolivia and produced 85% of the world’s Silver What happens to the price or value of silver around the world? Silver is the 1st global currency

Price of Silver Over Time

Change in Demand Demand goes up Demand goes down and supply stays the same producers can sell for higher prices to as people will pay more $$$$$ $$$$ $$$ $$ $ ####### ##### ### # Demand Down Demand goes down And supply stays the same producers have to sell for lower prices because are not as willing to pay high prices Demand Up

Change in Demand Global climate got colder Fur became fashionable Many countries got in on the fur trade in North America What happens to the price of fur? Global climate got colder Fur became fashionable

Price Vs. Availability The more abundant a good or service the less it costs The harder it is to find a good or service the more it costs Example: Pineapples & Diamonds $$$$ $$$ $$ $ price Very Rare Rare Abundant Availability

Price Vs. Availability Pineapples Diamonds

Price Vs. Availability What determines availability? Specialization Distance Limited Resources Anyone can work at McDonald's while there are only a few people that can perform surgery Goods coming all the way from Asia were expensive due to distance As goods like oil and gold get used up their price will go up

Profit/Loss Cost Revenue Profit Loss How much money does it take to make a good or provide a service Revenue How much money comes from the sale of a good or service Profit When you generate more revenue than it cost to produce Loss When revenue is less than what it costs to produce a good or service

create shorter shipping lanes Technology Now Then Cheaper Energy Bigger, Faster, Safer Ships Canals create shorter shipping lanes Faster, Safer Sea Routes found by explorers

When there is only one seller in a market Number Sellers Competition Drives prices down When one seller lowers prices more consumers will choose the lower price, other sellers have to lower to prices to compete Monopoly When there is only one seller in a market Why are Monopolies bad?

What happened to the price of Asian Spices in Europe as more countries began colonizing in Asia and importing Asian Spices?

Tariffs Tariffs Taxes that are charged to imports Countries make $$$ at trade ports as people pay tax to bring in goods Prices go up as tariffs become additional Cost

Contraband and Smuggling Goods that are illegal Countries would make rival country’s imports contraband to prevent them from making $$$ in their ports Smuggling Bringing in illegal goods Very profitable Prices go up as contraband goods are less available and are a high risk to import