1. What are two basic human problems? £ Scarcity  Resources are limited in quantity; finite £ Want  Human desire is essentially limitless £ Economics  The study of how societies distribute scarce resources

2. Economic Systems

3. MercantilismMercantilism £ Beliefs  All wealth in the world is finite; limited Think of a pie (Apple or Pumpkin) Think of a pie (Apple or Pumpkin)  Countries compete against each other for wealth  Individual countries need to accumulate gold and silver to be successful GOLD = STRONG ARMIES & NAVIES GOLD = STRONG ARMIES & NAVIES  Exports should be greater than imports Money coming in > Money leaving Money coming in > Money leaving

4. MercantilismMercantilism £ Beliefs (cont’d)  Countries should be self-sufficient Need source for raw materials Need source for raw materials Need market for manufactured goods Need market for manufactured goods  Countries must form colonies

5. MercantilismMercantilism Mother Country Foreign Country Colony Exports Imports Manufactured Goods Raw Materials Closed SystemOpen System Mother Country’s Goals:  Have exports greater than imports  Accumulate Gold  Be Self-Sufficient

6. British Mercantilism £ Chaos during the English Civil War prevented the British from running a well regulated empire £ The Navigation Acts (1650-1673)  First series of laws regulating colonial trade The colonies’ ability to trade was limited to certain European countries (Britain) The colonies’ ability to trade was limited to certain European countries (Britain) New taxes were placed on exports New taxes were placed on exports Greater royal control of North American trade Greater royal control of North American trade

7. British Mercantilism £ Benefits to the American Colonies  Benefited the colonial economy  The colonies were protected by the English military £ Negative Effects to the American Colonies  Limited colonial manufacturing  Colonists paid high prices for manufactured goods

8. British Mercantilism £ Enforcement  Enforcement of the Navigation Acts was poor  Smuggling & corruption were common £ Dominion of New England  Brief attempt at a unified New England  The goal was greater direct royal control of the colonies  Ended when William & Mary came to power during the Glorious Revolution Afterwards, mercantilist policies remained in effect but were widely resented & resisted. However, they were poorly enforced

9. Characteristics of Mercantilism EnglandEnglish Colonies Colonist were not permitted to make most of the finished products made in England Products such as tobacco and wood could only be sold to England or its colonies. Colonists could only use English ships to trade their goods. Colonial ships were protected by the English navy Colonist had to buy molasses from English colonies in the West Indies Colonist were assured a ready market for their goods Goods traded between Europe and America had to pass through England to be taxed

10. Who Benefits from Mercantilism? £ For every $4 of timber the colonists sold to England, England manufactures were able to make a table that sold for $24. Under mercantilism, colonist had to buy their furniture from England because England always wanted to maintain a favorable balance of trade. 2 £ ( British Pounds) = $4 12 £ ( British Pounds) = $24

11. Solve this Math £ The colonies sell four bundles of timber to England. They make $_______ £ English manufactures sell two tables to the colonies. They make $ ______ £ In total England makes $______ £ In total colonist make $ ______ £ Who earned more from the sale of goods, England’s colonies or England? Explain. £ Who benefits most from mercantilism? Explain

12. Triangle Trade £ £ Title the map “18 th Century Colonial Trade Routes” £ £ Label and identify colored dotted lines (------) the trade of iron, lumber & whale oil from New England and the Middle Colonies TO England. £ £ Label and identify with colored dots (……..) the trade of furs, indigo, and tobacco from the Southern Colonies TO England. £ £ Use a solid line to show the trade of manufactured goods from England TO each of the section of the colonies. £ £ Label and identify with red solid lines the “triangular trade” route £ £ Label the leg of the Triangle Trade known as the Middle Passage. £ When finished answer the Analysis and Conclusion questions back in your notes.