Unit 6: Macroeconomic Systems & the U. S Unit 6: Macroeconomic Systems & the U.S. Economy Lesson 1: Circular Flow Model & Factors of Production WARM UP If you want to make a sweater, what do you need and what do you have to do? ESSENTIAL QUESTIONS (WRITE DOWN!): What decisions must societies make about the distribution of economic resources? Lesson Vocabulary: Circular Flow Model Basic Economic questions Consumers Producers what to produce Factors of Production how to produce how to distribute wealth/work product Capital Entrepreneurship Land Labor Lesson Skills: Show what you know

Class Website: DEADLINES & HOMEWORK: Unit 6: Macroeconomic Systems & the U.S. Economy Lesson 1: Circular Flow Model & Factors of Production Class Website: www.mrggcivivcs.weebly.com DEADLINES & HOMEWORK: Lesson One: PT 6.1 – Due May 8 Lesson Two: PT 6.2 Due May 11 Lesson Three: PT 6.3 Due May 13 Vocabulary Quiz April 29th: Lessons 1-2 Review Packet: Due May 7th UNIT TEST: Thursday, May 7th ALL Review Packets: May 28 FINAL EXAM: June 5 Lesson 6.1 Performance Task Select a product of your choice and create a production plan for it (Big Mac, car, chair, book, etc.). Create a cartoon strip or diagram that shows how each factor of production is required to create your product: Capital, Entrepreneurship, Land, and Labor Alternative Option: write a rap or poem that applies each factor of production to making the product

Producers & Consumers Producers make stuff to sell for a profit Producers create SUPPLY But what do producers DO with the money they make? Consumers buy things they need or want Consumers create DEMAND But where do consumers GET the money they spend?

Circular flow model Money circulates in the economy, moving back and forth between producers and consumers simulation

Circular Flow Economic Model Quick Write (answer both): What two things do companies / producers get from individuals? What two things do individuals get from producers / companies?

OK…so how do producers decide what to make?

Scarcity forces us to make choices: BASIC ECONOMIC QUESTIONS: What to produce How to produce it Who gets what and how much? Who answers these questions? - Enter politics….

What goes into your pencil?

Factors of Production CELL: Capital Entrepreneurship Land Labor

Factors of Production: http://www.youtube.com/watch?v=K8kZP4dRe3w Identify each factor of production in the video clip

Capital When wealth is used to create more wealth Goods used to make other goods and services Machines, buildings, and tools can be used to make other things

Capital

Capital Goods vs. Consumer Goods Used to make other goods Consumer goods Final products that can be sold or used directly

Entrepreneurship Taking the initiative to start a business Requires having a business plan to succeed Must be willing to take risks Thinks big

Land Natural resources Anything not made by human beings Trees Cotton Water Iron

Labor Human resources anything that someone does (mental or physical) to produce a good or a service Picking crops Designing a microchip Bringing a meal to a table

Groups of Three Create a production plan for one of the following products: A Big Mac, a car, a chair, a book Create a cartoon strip or diagram that shows each factor of production required to create your product: Capital, Entrepreneurship, Land, and Labor Alternative Option: write a rap or poem that applies each factor of production

Land + Labor = Wealth Wealth created when human labor adds value to natural resources

Examples of wealth Can be for sale, or for personal use Turning trees into pencils Taking a pencil and drawing something

BUT WHO GETS TO BE WEALTHY? When we make all this stuff, who benefits from it?

Scarcity forces us to make choices: BASIC ECONOMIC QUESTIONS: What to produce How to produce it Who gets what and how much? Who answers these questions? - Enter politics….

Extra Credit Write ACECECECES paragraph: QUESTION: What are the factors of production required to make an airplane?? A – The factors of production required to make an airplane are…capital, entrepreneusrhip, land and labor. C – An example of capital in making a big mac is… Explain C – An example of entrepreneurship in making a big mac is… C – The land and resources required to make a Big Mac are… C – The labor required to make a big mac involves…

End of Class Quiz Name the four factors of production Where do companies like McDonalds get their money from? How does consumer choice influence companies?