Download What is Globalization?

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
• Country: 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: At the given price, suppliers sell
all the goods they’ve produced & consumers get all
the goods they’re demanding.
• Too much supply (surplus), not enough demand = prices
drop
• Too much demand & not enough supply (deficit) = prices
rise
• “Market fluctuations”
GLOBAL ECONOMY
• Goal is 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
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.
• 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