PAGES 49-73

 I. What is Economics? ◦ 4 Economic Questions ◦ Economic Terminology  II.Supply & Demand ◦ Competition, Surplus & Scarcity ◦ Law of Demand  III. Money ◦ Bartering ◦ Silver & Gold ◦ Interest & Interest Rates  IV. World & U.S. Economy ◦ Proprietorship, Partnership & Corporation ◦ Stock Market ◦ Tariffs & Trade Agreements  V. Louisiana Economy

 Economics is the study of production, distribution and the consumption of goods and services.

 Good:  Service:

 What is being produced or offered?  How will it be produced or offered?  How much should be produced or offered?  Who will buy the product or service?

 Market System: (Capitalist System) People are allowed to operate business with little government influence. Citizens answer the four questions of economics. Example: United States  Regulatory Agency:  Command System:(Communist System) A small group of government officials answer economic questions. Example: China and Cuba  Traditional System: Questions answered by tradition and custom. Example: African countries  Dividends:

 Please Draw the Chart on Pg. 51 which shows Economic Flow.

 A market system is driven by supply and demand.  Demand – the desire, ability, & willingness to buy a product.

Price As price goes down… Demand Quantity demanded goes up… Price As price goes up… Demand Quantity demanded goes down…

 Why so many choices?  Consumers want options.

 Which one do we choose?  Marketing  Advertising  Other techniques

 What is a surplus? is an amount or quantity greater than what is needed.  What will happen to products if a surplus exists?  Scarcity exists when there is not enough of a product? ◦ What happens to prices if scarcity exists?

 Supply & Demand also effects wages, salaries, and unemployment. ◦ What is the difference between wages and salaries?  Wage –  Salary -

 During prehistoric times, people used the barter system to buy and sell goods. Native Americans used the barter system. Ex. Pg 56  People started using gold and silver because it was more convenient. The metals do not tarnish and are scarce. Eventually governments created coins.  Today money is backed by government with gold. Money without government backing has no value.

 Checks, debit cards and credit cards also allow people to purchase items.  Interest is charged when using credit cards. Banks also charge interest with loans.  There are two types of interest: simple & compound.  If you had a credit card, which kind of interest would you like not to have?

 Inflation occurs when demand for goods and services is greater than the supply.  Deflation occurs when there is a greater supply of goods and services than there is demand for them.

 Proprietorship – Owned by one person  Partnership – Two or more people  Corporation – Large business (Delta Airlines)  Tariff – A tax on foreign or imported goods  North America Free Trade Agreement (NAFTA) (U.S., Mexico, and Canada – 1993)

 Since beginning as a French colony LA’s economy was based on natural resources and farming.  When demand for LA’s resources strengthen so does the state’s economy.  Louisiana’s top resource is oil & natural gas. ◦ 15% of oil in nation ◦ Exxon refinery in Baton Rouge is largest in western hemisphere

 Fishing is the state’s 2 nd most important industry. Pg. 69  LA plays an important role in international trade due to location on the Mississippi River. ◦ 25% of nations exports go through LA ◦ New Orleans is the third busiest port in the world

 Louisiana has become a popular place to film movies.  Big Momma’s House 2  The Dukes of Hazzard  Interview with a Vampire  The Haunted Mansion  Mortal Kombat  The Waterboy  Dead Man Walking  Ray

 Income Tax -  Property Tax -  User Fees -  Voters usually have the right to approve taxes.