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GLOBAL ECONOMICS
GLOBALIZATION UNIT LESSON 1
OBJECTIVES
• Review economic systems.
• Introduce key economic terms related to
globalization.
WARM UP & REVIEW
• What is economy?
• Way in which we
manage resources to
meet needs
• What are resources?
• Human: time, $, skill
• National: natural
resources, capital,
labor force and
technology
• Limited resources =
Scarcity
BASIC ECONOMIC SYSTEMS
• 3 Basic Questions?
• What to produce?
• How to produce?
• For whom to produce?
• Basic Systems?
• Traditional
• Cultural needs, subsistence
• Market
• Free choice, competition
• Command
• Govt decides, controls
• MIXED
• Economics
• Study of decisionmaking & resource
allocation.
THE LAW OF SUPPLY & DEMAND
• Supply
• The amt of a certain
good or service
producers are willing to
supply when receiving a
certain price
• Law of Supply: The higher
the price, the higher the
quantity produced
• Demand
• How much (quantity) of a
product or service people
are willing to buy at a
certain price
• Law of Demand: The
higher the price, the less
demanded
WHAT’S THIS MEAN?
• Desire equilibrium: Quantity supplied = quantity
demanded. Neither shortage (prices rise) nor
surplus (prices drop)!
• “Market fluctuations”
• Video
PRACTICE
• The National Football League “blocks out” local
television of football games when the game in
question is not sold out in advance. The NFL
supports this action because it
• A. Increases the demand for football tickets.
• B. Reduces the supply of football tickets.
• C. Reduces the price of football tickets.
• D. Increases the amount of money that the
networks pay to televise NFL games.
GLOBAL ECONOMY
• Goal: Effective
resource mgmt for
most efficient
production
• Weigh opportunity
cost
• Value of alternative
that must be forgone
to pursue certain
action
• Specialization &
Comparative
Advantage
• Nation makes certain
products at lower
cost (higher quality)
than others
WHY GLOBAL TRADE?
• Make better product
• Make cheaper product
• If can’t make on own = import
• Exchange rates = more for $ elsewhere
• Sell to more = make more $
• Ease of access to markets
GLOBALIZATION REVIEW
• What is globalization?
• Growing integration of
the world’s economies
and societies.
• How join in?
• Open country to free
trade
• Open currency markets
• Privatize business
GLOBAL IMPACT
• As global economy
becomes more
interdependent
• Dvpt depends on
wise use of globally
scarce resources
• Decisions in one
location affect all
others
ACTIVITY
• Illustrated Global Economic Terms
• Working in groups of 4, create illustrations for each of the
terms on your vocab page.
CLOSURE
• What factors drive
global economic
decision making?
•
•
•
•
Resource Scarcity
Supply & Demand
Opportunity Cost
Comparative
Advantage
HOMEWORK
• Choices Reading –
International Trade:
Competition &
Cooperation in a
Globalized World
• Available in
classroom