1. Economic Overview

2. Economic Systems Economics –The study of how people manage their resources Produce and exchange goods and services.

3. Key Terms Producers –Owners & workers Consumers –People who buy and use the goods and services Goods –Products being made or grown Pencils, paper, books, clothes, houses, bikes, iPods, gas Services –Jobs people do to help other people Doctor, teacher, mechanic, waitress

4. Summarizing Activity Goods vs. Services –Copy the chart below –Mark if the worker provides a good or service WorkerGoodsServices Jewelry Maker Mayor Baker Teacher Firefighter Farmer

5. Human Resources –Skills people have to produce goods or services The people that do the work. Capital Resources –Things people make (machines or equipment) to produce goods and services Natural Resources –Nature = forests, water, fertile soil –People can’t make these resources Renewable Resources – able to replenish – trees Non-renewable Resources – not able to be replenished - oil Types of Resources

6. Summarizing Activity Write each resource on your paper. Label which type of resource it is. –N = natural resource. –H = human resource. –C = capital resource. 1.Ocean 2.Hardware store 3.Dentist 4.Coal 5.Steel mill 6.River 7.Bus 8.Bus driver

7. 3 Basic Economic Questions 1.What will be produced? 2.How will it be produced? 3.For whom will it be produced? Based on how a country answers these questions will determine what type of economy they will have.

8. Key Terms Currency –Money that is accepted as a medium of exchange USA = dollar, England = pound, Russia = ruble, Greece = euro Exchange Rate –Amount of one currency that can be purchased for another currency Supply and Demand –Price of a good rises or falls depending on how many people want it or amount available Scarcity –Not enough goods or services are available –Conflict of what people want and what is available to them Entrepreneur –Person who owns a company and assumes the risk for its success

9. International Trade Many things we want or need come from other parts of the world. International trade is the movement of goods and services between countries.

10. Export vs. Import Exports –Goods or services that are produced in one country. –Shipped to consumers in other countries to be used. Countries must have a “Balance of Trade” between Imports and Exports. Imports –Goods or services that are produced in another country. –Shipped into this country to be sold to consumers.

11. Trade Barriers Some countries limit the amount of imports into a country by using trade barriers. –Tariffs A fee or tax charged for goods brought into a country from another country Used to protect products made within a country. –Embargo Government placed restrictions on the import and export of certain goods. Usually a political action backed by the military.

12. Summarizing Activity – Think, Pair, Share What do you think? –Pretend the USA could not import good from other countries. How would your daily life be different? –Share with your partner how your life would be different.

13. Types of Economic Systems Market Economy –Businesses are privately owned (Capitalism) Workers produce goods and services Workers paid from profits as determined by owners –No government control of business Examples: No “true” market economy

14. Command Economy –Government owns ALL industry (Communism, Socialism) Government provides all goods and services the people need Government determines what is produced, price and wages Example: Cuba, China, North Korea

15. Summarizing Activity – Think, Pair, Share What is the difference between a Market Economy and a Command Economy?

16. Traditional Economy –Based on customs and traditions (Agrarian societies) –Usually based on agriculture and hunting –Typically, non-industrialized countries –Example: Aborigines in Australia

17. Mixed Economy –Features of both Market and Command Economies Businesses are owned by both individuals and the government Government controls select businesses –Ie. Post office, healthcare, banks Example: USA, Great Britain

18. Review TYPES OF ECONOMIC SYSTEMS DefinitionAssociated TermsExamples in Practice 1) Market economyAn economic system in which individuals own and operate the factors of production. Free enterprise Capitalism 2) Command economyAn economic system in which the government owns and operates the factors of production. Socialism Communism Cuba China 3) Traditional economyAn economic system based upon customs and traditions. Economy is based upon agriculture and hunting. Non-Industrialized Agrarian societies Aborigines 4) Mixed economyAn economic system that has features of both market and command economies. Free enterprise Capitalism United States Great Britain Japan

19. Personal Money Management Savings –Money that has been set aside for future use Budget –Financial plans that allow a person to manage money –Helps prevent debt Loan/Credit –A way to borrow money to buy something now and pay for it later. Interest –A fee that is added to the amount of money borrowed.