1. You Can’t Always Get What You Want But You Can Get What You Need

2. Production is knowing – What - How - For Who -

3. Factors of Production- Land- fixed Capital- items used in service Financial Capital- money Labor- skill Entrepreneurs- risk takers

4. To have Value- an object must be Scarce and Wanted But what gives an object its wealth?

5. Wealth- accumulation of products that are: Tangible Scarce Useful Transferable

6. Adam Smith- 1776 Wealth of Nations Single job skill = production

7. “Nation’s wealth is defined by the sum of its labor-produced goods, not by who owned those goods.” “A true-free competitive market-operating with a minimum of government intervention would bring about the greatest good for society.” “Laissez-faire”- government’s role

8. Supply- volume for sale Law of Supply- more is offered at a higher price and less at a lower price When sales slow, maximum price reached

9. Demand- desire, ability and willingness to buy a product Law of Demand- quantity sets the price

10. When demand drops, price drops and less is produced

11. Pricing Theory- similar goods for similar price Competition keeps prices down Buyer competition keeps prices steady

12. Similar products sell within a narrow range Prices get customers to forget minor differences Competition

13. Monopoly- one seller of a product Natural monopoly- Costs minimized “Franchise” tag

14. Oligopoly- dominant few

15. Technological monopoly- patents Invention- covered for 20 years Design- covered for less time Copyright- lifetime plus 50 years

16. Macroeconomics- national economics employment, G.D.P., inflation, growth, distribution of income

17. Unskilled labor- least amount of human capital invested Semiskilled labor- work machines with minimum training

18. Skilled labor- use complex equipment without supervision Professional labor- knowledge based education and managerial skills

19. Theory of – Wage Determination- Supply and demand for a worker’s skill

20. Comparable worth- equal pay for equal work Part time workers- less than 35 hrs. weekly

21. Minimum Wage- Texas- $6.55 Lowest legal wage Does minimum wage lower the number of people who have a job?

22. Minimum Wage 3% of Texas workers 1.7 million or 2.2% of U.S. workers

23. Tipped employees $2.13 per hour If tips plus $2.13 do not equal $6.55, employer must make up the difference

24. Employees under 20 May be paid $4.25 per hour for the first 90 days on the job

25. Stimulates consumption- more money to low-income workers Increases the average living standard Creates incentive to work Pros of minimum wage-

26. More people enter the job market instead of pursuing further education Wage increase passed on to customers Prices unemployable out of the market Cons of minimum wage-

28. Evolution of Money

29. Barter economy- goods for services Money- a medium of exchange Medium of exchange- something accepted by all parties

30. “Salarium” – Roman salt payment for military service = “Salary”-

31. Characteristics of Money Portable Durable Divisible Limited in supply

32. Development of Banks

33. Colonial banks issued own money Gold or silver backing 1865 – 1,600 state banks 10,000 kinds of paper currency “Greenbacks” – federal currency “Legal tender” – guaranteed

34. “Gold Certificates” – backed by gold - 1861 “Silver Certificates” – silver backed – 1878 “Treasury Coin Notes” – 1890 – both Gold Standard- 1900, currency backed by set price 1933- gold or certificates must declare Gold Reserve Act of 1934 exchange gold certificates

35. Abandoning the Gold Standard 1930s cashing in for gold “Inconvertible fiat money standard”- Neither gold nor silver monetary standard

36. Ones – 18 months Fives- 15 months Tens- 18 months Twenties- 2 years Fifties and Hundreds – 8 years Life Span of Money

37. Trade union- skilled workers, same job Industrial union- all workers, same industry Right to work law- Illegal to force union membership as term of employment

38. Closed shop- union workers only Union shop- membership required after employment