1. Unit 6: Macroeconomic Systems & the U. S
Unit 6: Macroeconomic Systems & the U.S. Economy Lesson 1: Circular Flow Model & Factors of Production
WARM UP
If you want to make a sweater, what do you need and what do you have to do?
ESSENTIAL QUESTIONS (WRITE DOWN!):
What decisions must societies make about the distribution of economic resources?
Lesson Vocabulary:
Circular Flow Model
Basic Economic questions
Consumers
Producers
what to produce
Factors of Production
how to produce
how to distribute wealth/work product
Capital
Entrepreneurship
Land
Labor
Lesson Skills:
Show what you know

2. Class Website: DEADLINES & HOMEWORK:
Unit 6: Macroeconomic Systems & the U.S. Economy Lesson 1: Circular Flow Model & Factors of Production
Class Website:
DEADLINES & HOMEWORK:
Lesson One: PT 6.1 – Due May 8
Lesson Two: PT 6.2 Due May 11
Lesson Three: PT 6.3 Due May 13
Vocabulary Quiz April 29th: Lessons 1-2
Review Packet: Due May 7th
UNIT TEST: Thursday, May 7th
ALL Review Packets: May 28
FINAL EXAM: June 5
Lesson 6.1 Performance Task
Select a product of your choice and create a production plan for it (Big Mac, car, chair, book, etc.).
Create a cartoon strip or diagram that shows how each factor of production is required to create your product:
Capital, Entrepreneurship, Land, and Labor
Alternative Option: write a rap or poem that applies each factor of production to making the product

3. Producers & Consumers Producers make stuff to sell for a profit
Producers create SUPPLY
But what do producers DO with the money they make?
Consumers buy things they need or want
Consumers create DEMAND
But where do consumers GET the money they spend?

4. Circular flow model
Money circulates in the economy, moving back and forth between producers and consumers
simulation

5. Circular Flow Economic Model
Quick Write (answer both):
What two things do companies / producers get from individuals?
What two things do individuals get from producers / companies?

6. OK…so how do producers decide what to make?

7. Scarcity forces us to make choices:
BASIC ECONOMIC QUESTIONS:
What to produce
How to produce it
Who gets what and how much?
Who answers these questions?
- Enter politics….

8. What goes into your pencil?

9. Factors of Production
CELL:
Capital
Entrepreneurship
Land
Labor

10. Factors of Production:
Identify each factor of production in the video clip

11. Capital When wealth is used to create more wealth
Goods used to make other goods and services
Machines, buildings, and tools can be used to make other things

12. Capital

13. Capital Goods vs. Consumer Goods
Used to make other goods
Consumer goods
Final products that can be sold or used directly

14. Entrepreneurship Taking the initiative to start a business
Requires having a business plan to succeed
Must be willing to take risks
Thinks big

15. Land Natural resources Anything not made by human beings Trees Cotton
Water
Iron

16. Labor
Human resources anything that someone does (mental or physical) to produce a good or a service
Picking crops
Designing a microchip
Bringing a meal to a table

17. Groups of Three
Create a production plan for one of the following products:
A Big Mac, a car, a chair, a book
Create a cartoon strip or diagram that shows each factor of production required to create your product:
Capital, Entrepreneurship, Land, and Labor
Alternative Option: write a rap or poem that applies each factor of production

18. Land + Labor = Wealth
Wealth created when human labor adds value to natural resources

19. Examples of wealth Can be for sale, or for personal use
Turning trees into pencils
Taking a pencil and drawing something

20. BUT WHO GETS TO BE WEALTHY?
When we make all this stuff, who benefits from it?

21. Scarcity forces us to make choices:
BASIC ECONOMIC QUESTIONS:
What to produce
How to produce it
Who gets what and how much?
Who answers these questions?
- Enter politics….

24. Extra Credit Write ACECECECES paragraph: QUESTION:
What are the factors of production required to make an airplane??
A – The factors of production required to make an airplane are…capital, entrepreneusrhip, land and labor.
C – An example of capital in making a big mac is…
Explain
C – An example of entrepreneurship in making a big mac is…
C – The land and resources required to make a Big Mac are…
C – The labor required to make a big mac involves…

25. End of Class Quiz Name the four factors of production
Where do companies like McDonalds get their money from?
How does consumer choice influence companies?