The Circular Flow Of Economic Activity

Answer on a sheet of paper… 1) When you spend money, where do you spend it? 2) Think of the sources of income in your household. Where does your household income come from? NOTE: List AT LEAST three things for number one.

Microeconomics The study of how individuals and firms make decisions to allocate scarce resources.

With your group members… Look at your lists. What do your answers to number 1 have in common with each other? What do your answers to number 2 have in common with each other? Write these down on one sheet of paper under the headings “#1 in common”, and “#2 in common”.

Market

With your group members… Brainstorm words that you associate with the word “market”. 5 words per group member. Write them down.

With your group members… Brainstorm a list of things that a business or businesses might spend money on. Be specific! 3 entries per group member. Write them down.

So Far... 3 actors in the economy: Consumers buy goods and services. Producers Consumers Government Consumers buy goods and services. Producers buy the factors of production.

Obtain a marker board & marker. Copy the diagram on the board.

How should the arrows be labeled? Discuss with your groups. The 1st 3 groups with correctly labeled graphs get candy!

Each person should enter answers in on their own clicker. Group Quiz Each person should enter answers in on their own clicker.

1) Which numbers show the flow of goods and services?

2) Which arrows include Mr. Cook’s efforts in composing this lesson? B) 5, 7 C) 4, 2 D) 8, 6

3) Which arrows could include video games? B) 5, 7 C) 4, 2 D) 8, 6

4) Which numbers show the flow of interest, wages, rent, & profits? D) 8, 6

5) What do numbers 1, 3, 6, & 8 have in common? A) They’re goods. B) They’re services. C) They’re FOP. D) They’re money.