Understanding the basic operation of an economic system Allocating resources in a market economy.

Slides:



Advertisements
Similar presentations
Unit 4 4th Grade Social Studies Vocabulary
Advertisements

Warm-up On a piece of paper, describe how you think individuals (consumers), businesses (producers), and the government interact with each other in todays.
Trade and Economic Growth
Economic Growth (GDP) With Mrs. Eskra. OBJECTIVES: WHAT WILL YOU LEARN? – What GDP is and what it measures. – The two approaches to calculating GDP Income.
1. People can’t have everything they want, so they choose. 2. People make better decisions when they weigh the present and future benefits and costs of.
Business in a Changing World
The Simple Circular Flow Model
Principles of Macroeconomics
©2011 Cengage Learning. Chapter 2 REVIEW OF THE ECONOMIC PRINCIPLES OF CAPITALISM ©2011 Cengage Learning.
Objectives Analyze a circular flow model of a pure market economy.
Economic Systems Section 2.2 Scarcity of economic resources forces every country to develop an economic system that determines how resources will be used.
Economic Resources And Systems
Product and Resource Markets
LCJSMS WE THE STUDENTS 8 TH GRADE 2013 Economics.
Circular Flow Diagrams
Topic 1Topic 2Topic 3Topic 4Topic
FREE ENTERPRISE IN THE UNITED STATES
Circular Flow & Business Cycle
Chapter 19 Objectives: 7.01, 7.04, 7.05, 7.06, 8.02, 8.03, 8.06, 9.01.
Economics Basic Economics. What is Economics?  It is the study of how individuals and nations allocate their scarce resources for the fulfillment of.
Free EnterpriseCapitalism Free Enterprise.
Economics Review 1. What is the human effort that is used to produce goods called? A profit B capital C labor D stock.
Factors of Production A shortage of resources is called scarcity. A basic economic problem for any society is how to manage its resources. To meet the.
What is Economics?  An economic system is a country’s way of using limited resources to provide goods and services.  Scarcity means that there is never.
Economic Activity and Productivity. To the economist, a market is a location or situation where buyers and sellers exchange an economic product Markets.
ECONOMIC PRINCIPLES CH. 18&19. GOODS AND SERVICES Goods- production output in the form of material items such as books, movies, or automobiles Services-
Developing Business and Community Leaders for Tomorrow. American Private Enterprise System College of Agriculture, Food and Environment.
Understanding the circular flow of income. HOUSEHOLDS RESOURCE OWNERS Business firms Money payments Income payments Wages, Rent, Interest, Profits Consumer.
The Circular Flow Model describes and shows how the economy interacts.
Economic Activity and Productivity
Households What are “Households” in terms of the Circular Flow of the Economy? PEOPLE Workers Land Owners Investors Renters Home Owners Families You &
Chapter 17 Sec 2. Bell Ringer What do you do to get your pizza? What happens with the money you give the pizza shop? Name something the pizza shop owners.
Chapter 1: The Basics of Economics
Bell Ringer Activity Which economic system does the United States have? (Command, Market, or Mixed) Why do you think that?
The American Economy Chapter 19. Economic Resources Chapter 19.
Jeopardy Trade Terms Productive Resources Key Econ Terms Extras Q $100 Q $200 Q $300 Q $400 Q $500 Q $100 Q $200 Q $300 Q $400 Q $500 Final Jeopardy Econ.
Chapter Seventeen The American Economy The Economic System ~~~~~ Making Business Decisions.
Unit 2: Economics.
The American Private Enterprise System. Part I How America Is Organized to Do Business.
ECONOMIC SYSTEM COMPONENTS Private Ownership l Control of productive resources land labor capital that are used to produce goods and services.
The American Economy.
Economics. What resources were used to produce this car?
Chapter 2. A. A shortage of resources used to satisfy the wants and needs B. Basic economic problem for any society is how to manage its resources. C.
Economics 101. Economics  Is a Science that examines how goods and services are produced, sold, and used.  It involves how people, governments and businesses.
Basic Economics.
AP MACROECONOMICS INTRODUCTION. MACROECONOMICS Macroeconomics is the study of the economy as a whole. Microeconomics is the study of individual parts.
Circular Flow Diagrams Economists use the circular flow diagram to show the high degree of economic interdependence in our economy. Money flows in one.
Budgets and Businesses Workshop. Budget: is a plan that shows income, spending and saving. Income: Spending: Saving:
What is Economics? How Economic Systems Work Economic Resources Capitalism and Free Enterprise.
Economic Activity and Productivity. To the economist, a market is a location or situation where buyers and sellers exchange an economic product Markets.
The Circular Flow of Economic Activity
Economic Activity 8.03 Explain the circular flow of economic activities and how interactions determine the prices of goods and services. Part-time workers.
What goods and services should be produced? How should they be produced? For whom are they produced? How a society answers these questions determines.
The Fundamental Economic Problem
Chapter 19 The American Economy.
Circular Flow & Business Cycle
Circular Flow of the Economy
American Private Enterprise System
Mr. Mayer AP Macroeconomics The Circular Flow of Economic Activity
Economics Vocabulary.
Chapter 17 The American Economy.
Factors of Production.
Communism Socialism Laissez Faire Capitalism How the Economy Works
The Circular Flow of Economic Activity
The Circular Flow Model
What is economics? Part one.
Learning Economics.
Factors of Production.
The Role of Households & Businesses The Matrix
Economic Terms Review.
Presentation transcript:

Understanding the basic operation of an economic system Allocating resources in a market economy

limited resources or The Factors of Production… The root of the scarcity problem

Factors of Production Groups of resources used to make all goods and services Land, Land, labor, labor, capital, capital, entrepreneurship entrepreneurship Privately owned in a market system

LAND Natural resources

LABOR Any effort a person devotes to a task for which that person is paid

CAPITAL Any human made resource that is used to create other goods and services Physical capital goods like building and tools for the purpose of productionPhysical capital goods like building and tools for the purpose of production Human capital is the knowledge and skills a worker gains through education and experienceHuman capital is the knowledge and skills a worker gains through education and experience

ENTREPRENEURSHIP A person who assembles the factors of production to create goods and services Risk-taker!

Circular flow of economic activity

Tying it all together… Maintaining a proper functioning a free market is not easy or simple The Pillars of Free Enterprise

Pillar Explanation (From producer view & consumer view) Example Private PropertyFor purposes of business enterprise, or as a result of consumer choice Factory owner Home owner Car owner ChoiceFor purposes of production and profit, to fulfill consumer wants/needs open a business Choose a profession job Consumer choice Voluntary ExchangeWhere the producer and consumer come together: the marketplace (willingly buy or sell) Places of exchange (mall, internet) Contracts CompetitionWithin industries –maintain quality and fair prices, As consumers (demand) push prices up Gas stations, Airline industries, Supermarkets, Stock Market Economic IncentivesFor purpose of profit, wage, interest, Or “get a good deal” Successful entrepreneurs make big money -profit Salary, Fringe benefits

PAYMENTS: Economic Incentive RENTSALARYINTERESTPROFIT LAND LABOR CAPITAL ENTRE- PRENEURSHIP

Why money…

Government’s Role? From Res. Owners to Gov’t – taxes – Productive services From Bus. Owners to Gov’t – taxes – business services From Gov’t to Res Owners – money payments – Gov’t services From Gov’t to Bus Owners – money payments – Gov’t services

Gross Domestic Product one of the primary indicators used to gauge the health of a country's economy at its most basic: a total of what everyone has earned in a year (income approach), or by a total of what everyone spent (expenditure method). what GDP represents, has a large impact on nearly everyone within that economy Adapted from:

HOW DO THE FOUR FACTORS OF PRODUCTION AND THE CIRCULAR FLOW OF ECONOMIC ACTIVITY RELATE TO … UNEMPLOYMENT? BUSINESS GROWTH? MINIMUM WAGE? GOVERNMENT SPENDING?

Feedback: Privacy Policy Feedback
Do Not Sell My Personal Information
About project: SlidePlayer Terms of Service

© 2024 SlidePlayer.com. Inc. All rights reserved.