Supply & Demand

Adam Smith, the father of modern economics, wrote a book called The Wealth of Nations published in 1776. Economics = how people produce, buy and sell goods & services He proposed that the more freedom individuals have, the more harmonious society will be Smith said that wealth comes from labor, not a zero-sum game (if one gains, the other loses). Capitalism = free market = Laissez-faire (“Let it be”) – little to no government regulation

3 Strategies for helping economies grow: 1) Letting people pursue their own self-interest or individual goals Invisible Hand = a hypothetical economic force that in a freely competitive market works for the benefit of all Or, The invisible hand refers to the self-regulating nature of the marketplace in determining how resources are allocated based on individuals acting in their own self interest 2) Division of labor – simple tasks 3) Free trade

Supply & Demand dictates how much a consumer will pay for a good or service Supply = How much a good or service there is; something producers or service providers will sell at a particular price Demand = How much people want a product or service

Companies will generally produce more of a product when they can sell it at a higher price When a product gets more expensive, the demands decreases. The equilibrium point is the price of a good or service when the supply of it equals to the demand for it in the market. Essentially, everyone can buy and sell as much as they want.

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https://en.wikipedia.org/wiki/Supply_and_demand

Effects of the Industrial Revolution

Economic Effects New inventions and development of factories Rapidly growing industries in the 1800s Increased production and higher demand for raw materials - exploitation Growth of worldwide trade – globalization Highly developed banking and investment system

Social Effects Increase in population of cities Lack of city planning Loss of family stability Expansion of the middle class Improved standard of living Encouragement of technological progress

Political Effects Child labor laws to end abuses Reformers urging equal distribution of wealth Social reform movements such socialism (form of Marxism which becomes communism) Trade unions formed

What is a trade union? A trade union is an organization made up of members and its membership must be made up mainly of workers. One of a trade union’s main aims is to protect and advance the interests of its members in the workplace

Why join a union? Some workers join a trade union because they believe that a union can: Negotiate better pay Negotiate better working conditions, like more holidays or improved health and safety Provide training for new skill All of this is achieved through collective bargaining = a union and employer can negotiate over terms and conditions

Effects of Globalization New Rulers of the World (first 13 mins) https://www.youtube.com/watch?v=pfrL2DUtmXY