1. Economic Basics
Unit 4 part 2

2. Levels of economic study
Economics is the scientific study of the means of producing and distributing goods and services so that they may be consumed by others.
Microeconomics
the part of economics concerned with single factors and the effects of individual decisions.
Macroeconomics
the part of economics concerned with large-scale or general economic factors, such as interest rates and national productivity.

3. Factors of Production
Land – natural resources available for production.
Labor – the human input into the production process
Capital – goods or money used in the supply of other products
Enterprise - entrepreneurs organize the factors of production and take risks

4. ECONOMIC SYSTEMS
Procedure used to produce and distribute goods and services
Answers the economic questions:
WHAT is produced?
HOW is it produced?
FOR WHOM is it produced?

5. No Warm-up
Take the reading from the grey table and finish filling out the chart from yesterday.

6. Economic Systems Command economy
An economy in which most economic issues of production and distribution are resolved through central planning and control
Market economy
An economy that relies on a system of interdependent market prices to allocate goods, services, and productive resources and to coordinate the diverse plans of consumers and producers, all of them pursuing their own self-interest
Traditional economy
An economy in which customs and habits from the past are used to resolve most economic issues of production and distribution
Socialist economy
An economic and political system based on public or collective ownership of the means of production
Mixed economy
an economy that involves a degree of private economic freedom mixed with a degree of government regulation of markets
In addition to understanding the basic terms associated with economics, you'll also need to familiarize yourself with different economic systems. An economic system is the way that production within a society occurs. It involves how goods or services are produced, distributed, and managed within the society. Here are the economic systems you should be familiar with. Note: Sometimes people conflate (confuse) some of these economic system terms with political system terms.

7. Economic Systems
Gift Economy - A gift economy is one in which goods and services are freely given to others without any expectations for returns of the favor.
Barter Economy - A barter economy is one in which goods and services are traded for other goods and services without an intermediary form of payment (like money).

8. Economics 101: The Bare Bones You Need In order to even discuss economics, you will need to know what the following terms mean:
Production - Production is the creation of a good or service that has value to another individual.
Distribution - Distribution is the method of getting the goods to the individuals who will use them.
Consumption - The actual use of the goods that are produced is what is known as consumption. Often times, consumption produces some form of waste.

9. Start homework

10. Warm-up List the 4 factors of production.
List the 3 questions all economies answer.
Which type of economic system do you think is the best? Why?

11. Competition – when different businesses sell the same thing; struggle to get the best product at the lowest price.
Market – a location that allows buyers and sellers to get together to buy/sell goods and services.
Input – a resource or good that is used to make something else.
Output – amount of something produced.

12. Circular flow – a model showing how goods, services, and money flow among sectors and markets in the US economy
Supply and Demand - supply is the number of goods or services produced and demand is the number of consumers wanting the goods or services.

13. Household - The household is the independent unit of customers.
Firm – a business or group that produces a good or service

14. free enterprise, laissez-faire – an economic system where individuals and businesses can compete for profit w/minimum gov’t involvement.
profit motive – the driving force that encourages individuals and businesses to improve their material well-being.
Scarcity – the situation of not having enough resources to satisfy one’s needs/wants.
Monopoly – a sole provider for a good or service.

15. Gross Domestic Product – GDP the total market value of all final goods and services produced in a country during a single year.
Gross National Product (GNP) measures the total economic output of a country, including earnings from foreign investments.
Fiscal policy – how the gov’t uses taxes and spending to reach economic goals.
Monetary policy – the manipulation of the money supply to affect the cost of credit, and economic growth. Done by the Federal Reserve.

16. High GDP 
High average wages
Controlled Inflation (how much the prices of goods, services and wages increase each year)
Low Unemployment 
Diverse industries
Demographics (long life expectancy, low child mortality, low birth rate, etc.)
Access to education, healthcare, clean water, technology
Gender equality
Low risk of disease
High literacy rate
Developed, underdeveloped, less developed – depends on if a nation meets a lot, some, or few of the indicators (on the left)

17. Business cycle - the fluctuation in economic activity that an economy experiences over a period of time. Basically defined in terms of periods of expansion or recession.
Consumer price index - (CPI) measures changes in the price level of market basket of consumer goods and services purchased by households.

18. Start homework

19. Make a bingo chart like the one below, and fill in each square with a vocab word we just learned.
Free space

20. Make flashcards for 5 words for which you think you’ll have a hard time remembering the definitions