Download Fabulous Friday April 24

D60
Thankful Thursday,
November 19
Pamphlets needs to be finished and turned in.
Define 1-20 pages 470 (chapter 17)
Go over Chapter 17 Project
Groups:
GROUP 1
GROUP 2
Katelyn
Vocabulary/Reading Focus Jackson
?s
Cam
Reading Check ?s/Create a Alexis
review
Thomas
Tabby
Notes sections 1 & 2
Jocelyn
Nya
Alex
Chyra
Illustrations
Notes Section 3/Create PowerPoint
GROUP 3
GROUP 4
GROUP 5
GROUP 6
Ryan
Alexis
Kate
Hannah
TJ
Hunter
Aaron
Jessica
Liz
Dylan
Lauren
Elizabeth
Justice
Jacob
Tristen
Maggie
Vic
Keanna
Nate
Selah
Groups:
GROUP 1
GROUP 2
Kayla
Daniela
Vocabulary/Reading Focus ?s
Chase
Chandler
Reading Check ?s/Create a review
Kane
Rodal
Notes sections 1 & 2
Sydney
Austin
Mike
Javae
Illustrations
Notes Section 3/Create PowerPoint
GROUP 3
GROUP 4
GROUP 5
Tiffany
Heath
Jessica
Demetria
Courtney
Alexis
Claire
Becca
Samantha
Gabe
Kaeli
Savannah
Ian
Jay
Natalie
D64
Marvelous Monday, November 30
OPENING ACTIVITY:
• Copy the following question and write out its
complete answer.
A country with a market economy will support and
maintain property rights to increase its
a. unemployment rate.
b. government debt.
c. money supply.
d. growth rate.
You may
choose your
seat.
Groups finish their presentations
on Chapter 17
• 1st – 4 groups
• 3rd – 3 groups
• Explain to students they are to take notes and will
need these notes for Friday’s notebook check.
D65
Terrific Tuesday, December 1
OPENING ACTIVITY:
• Copy the following question and write out its
complete answer.
Which factor most contributed to improved cell
phone technology in recent years?
a. Government regulations
b. Competition among companies
c. Increase in stock offerings
d. Abundant natural resources
Reminder…
• If you did not turn in a paper telling me what you
did for the project, do so before you leave class
today.
• If you were absent, I need you to write down what
you did for the project and turn it in to me.
What is Economics?
• Many people say ECONOMICS
is the driving force of human
interaction and studying it
reveals why people and
GOVERNMENTS behave in
particular ways. When you
think of the word
ECONOMICS, what are the first
3 words that come to mind?
“The Economic System at Work”
• Why you study this in Civics…
American economic freedoms include the freedom
to buy and sell, to earn a living, to earn a profit, to
compete, and to own property.
Think/Pair/Share
Which of these freedoms have you experienced in
your daily lives?
How are these freedoms important to the health and
well being of US citizens?
Chapter 17-1
• The US has a “free market” economy. This means
that if you want to start a business, you can. Your
success will be determined by your ability to run a
business and the market, not by a government
agency. This is why the US can be described as
having a “market” economy.
Economic Systems
• The purpose of an economic system is to help
people create and obtain the goods and services
they want and need.
• How goods and services are obtained is what
distinguishes different economic systems from each
other.
Competition for Resources
• In order to provide a good or service, resources are
needed.
• Resources are not unlimited, so businesses and
individuals must compete for the resources they
need.
• This competition eventually affects everyone, not
just business owners. HOW?
• It affects the prices we pay for the
goods we want.
Scarcity
• …is one result of competition for resources.
• ...is the combination of limited economic resources
& society’s unlimited wants.
• …is the most basic problem of economics because
it forces people to make decisions about how to
use society’s resources effectively.
Supply and Demand
• Changes in prices are usually the result of the laws
of supply and demand.
• These laws are among the most basic of all
economic principles.
Law of Supply
• States that businesses will produce more products
when they can sell them at higher prices.
• Businesses will produce fewer products when
prices are low.
DOES THIS MAKE SENSE TO YOU?
Why wouldn’t a business want to sell more products
at a lower price if it meant people would buy more?
Think about back-to-school sales. Notebooks @ $1
each. No limit. “SALE” = Notebooks # .25 limit 4 --Why the limit?
Law of Demand
• …states that buyers will demand or want a greater
quantity of a good when its price is low.
• As prices rise, the quantity demanded falls,
meaning when the price of a good goes up, people
buy less of that good.
• Turn to page 453.
How do businesses use the laws of
supply and demand to try to make a
profit?
• To increase their profit, businesses have to find the
highest price that customers are willing to pay for
the goods or services they offer.
Connect to Math
Jan’s Records is selling CDs for $18. Today, Jan sold 5
CDs. Nita’s Music is selling CDs for $12. Today Nita
sold 10 CDs. Which merchant made more money?
Why?
Jan made $90, while Nita made $120.
Although Jan wants to supply CDs at $18 a CD, there
is limited demand for CDs at that price. In contrast,
Nita is supplying CDs at a price which customers
prefer, or demand.
What factors might affect the
demand for a good or service?
• Price
• Quality
• Usefulness
• Ease of use
• advertising
Putting a Price on Things
Price or VALUE is based on
two basic factors
1. Supply
2. Demand
-Supply
-the amount of a good or
service that is available for
consumers to buy
-Demand
-the amount of a good or
service that consumers are
willing to buy
Determining Price
-Price is determined by
comparing the amount of
demand to the amount of
supply and finding an
amount where they are equal
--Market or Equilibrium Price
this is the point
at which
supply and demand
meet and price
is determined
Effects of Price
-Shortages
-when demand is greater
than supply
-What happens to price?
•It goes up
-Surplus
-When supply is greater
than demand
-What happens to price?
* It goes down.
The Law of Demand-quantity demanded is inversely
proportional to price.
Simply put, the higher the price, the lower the demand and
the lower the price, the higher the demand.
•In numbers it would look like this chart
Demand Schedule for Cookies:
Draw a graph
based on the
info in the
chart.
At a price of
Consumer will buy
.70 cents
100 cookies
.60
200
.50
400
.40
700
.30
1,100
.20
1,600
.10
2,300
•Economists also like
to look at things
graphically.
•It enables them to
see the quantity and
price on a limitless
scale.
•To do this they plot
what is known as a
demand curve:
• The price is always
on the vertical axis
(y) and the quantity
is always on the
horizontal axis. (x)
• If we were to plot
our points and draw a
demand curve for the
cookies it would look
like this graph.
-Elasticity Elasticity
-Is the degree to which a
change in price affects the
demand for the product
-Elastic Demand
-a change in the price DOES
affect the quantity
demanded
-Inelastic demand
-change in the price does
NOT affect the quantity
demanded
More Characteristics of a Market
Economy
• Free Enterprise is the ability of business owners to
operate however they see fit, with little direction or
interference by government.
• Free Enterprise offers businesspeople the opportunity
to make huge profits.
• Competition is vital to the free-enterprise system.
Remember, competition is the main factor in setting
prices. Competition also drives companies to improve
their products.
• The constant desire to improve products means that
innovation is also important in free enterprise.
Monopolies
• Are illegal in the US except for certain public
utilities to include the US Postal Service
The US Economic System
• Although the US is a market economy, it has
characteristics of other types of economies, making
the US a mixed economy.
• For example, you can start your own business
(market economy) but you are subject to
government regulations and guidelines (command
economy).
• Sometimes the government intervenes in business
to help control prices. One way it does this is by
subsidizing, or giving money to certain industries.
American Business
Economies of Scale
The idea that a larger business is more efficient than
a smaller one because of its ability to do things in
larger volume. Ex: To produce steel, electricity,
automobiles, & ships requires large & expensive
machines. Only large companies have the resources
and the tools to produce these goods efficiently.
• Conglomerates – the merger of businesses that
produce, supply or sell a number of unrelated
goods. The government monitors conglomerates
closely to be sure that economic competition is not
harmed.
What are some ways the government
helps protect workers?
• By establishing minimum wage laws, laws
guaranteeing workers’ safety, and laws to protect
people from discrimination
Let’s Review: True or False
1. The US economic system is called capitalism.
“T”
2. The US economic system is also called a free enterprise system.
“T”
3. Capitalism encourages people to invest their
money.
“T”
4. There is a lot of government interference in the US economic
system.
“F” – In the US economic system, there is freedom to compete without
unreasonable government interference.
5. In the US, monopolies, except for certain public utilities, are illegal.
“T”
Fill in the blank
6. The
states that businesses will produce more
products if they can sell them at higher prices.
Law of Supply
7. A company has a(n)
if it is the only
one selling or providing a product or service.
monopoly
8.
is the lack of a particular resource.
scarcity
9.
is the money that a business has left after it has
paid its expenses.
Profit
Exit Ticket (write in your NB)
• State one thing you learned about the Law of
Supply.
• State one thing you learned about the Law of
Demand.
• State the difference between elastic demand and
inelastic demand.
D66
Wonderful Wednesday,
December 2
OPENING ACTIVITY:
• Copy the following question and write out its complete answer.
Which statement best describes the relationship between
supply and demand?
a. A product with high demand and low supply will experience an
increase in price.
b. A product with low demand and high supply will experience no
change in price.
c. A product with low demand and low supply will experience an
increase in price.
d. A product with high demand and high supply will experience a
decrease in price.
Economic Choices
Opportunity Cost
This is the benefit that you have given up in order to
pursue an alternative.
Ex: If you decide to go to college after you graduate
from high school, one of the biggest costs is the fulltime income that you will not be able to earn
because of the time you will have to spend studying
and going to classes.
Every choice involves an opportunity cost!
Trade Off
This is the choice that you make when faced with
economic decisions where you have to choose one
thing over another.
Ex: If you choose to buy a DVD player, you are
exchanging your money for the right to own the DVD
player rather than something else that might cost the
same amount.
Economists identify many trade-offs in life. For
example, more pollution-free air means less driving,
and more driving means less pollution-free air.
Taking more time to study for a test means having
less time texting, and texting for a long time on the
phone means spending less time studying for the
test.
Sole Proprietorships
-A business owned by a single person or a married couple
-3/4 of all businesses are sole proprietorships
• plumber, dentist, lawyers
• “Helen’s Kitchen”
• any business that 1 person developed. ...
-Advantages
sole proprietor has
complete control &
decision-making
power over the business.
• No corporate tax payments.
• Minimal legal costs to
forming a sole proprietorship.
• Few formal business
requirements.
• A
Partnerships
* owned by two or more people
• A partnership is just that: -an agreement between two or
more people to finance and operate a business.
-Advantages
-pool resources and capital $$
• Because more than one person is involved in the venture, it may be
easier for you to secure financing than if you were a sole proprietor.
-Disadvantages
• Limited flexibility
• partners are personally liable for business debts and liabilities
Corporation
A business that has a great many owners
• A corporation provides limited
liability for the investors.
• The corporation files its own tax
return and pays taxes on its income.
- -pay dividends to shareholders
• Dividends are payments made by a
corporation to its shareholder members.
• When a corporation earns a profit or surplus, that
money can be put to two uses: it can either be reinvested in the business (called retained earnings),
or it can be paid to the shareholders as a dividend.
Non-Profit Organizations
-provides
a service but not to make large profits for the
owners
-many are Ex: charities or service groups
• actively engage in activities of public or private interest without any
commercial or monetary profit purposes.
EXAMPLES:
• environment, humanitarian aid, animal protection
• education, the arts, social issues, charities, health care
• politics, religion, research, sports or other endeavors
Advantages
• Tax exemption, eligible for private or public grants
• Limited liability
Article on non-profit
Tom Tillis
ENTREPRENEUR
Productivity
-Productivity
-the amount of a good/service
than can be produced in a given
time
-Increases in productivity allow
producers to make more of a
product in a given time and at the
same price which decreases cost
and increases profits
-better technology is a major focus
of increasing productivity
The Government’s Role
• Government ensures that big corporations do not
destroy competition from small businesses.
• Government protects a person’s rights to own
private property and to buy and sell in a free
market.
• Government taxes business income.
• Protects workers’ health and safety
• Prevents pollution of the environment
• Protects buyers from dishonest practices & harmful
products
• Ensures that employers cannot discriminate against
workers or job applicants
• Congress established a federal minimum wage
Handouts
• Liz’s Sections 1 & 2 review (print/copy)
Extra assignment if needed
• Graphic Organizer activity: describing the
relationship between economic terms; ex:
monopoly & competition
• Handout (print/copy)
Exit Ticket
• State 3 things you learned today
• State 2 ways you will study for tomorrow’s test
Icivics.org packet – “The Market
Economy”
Review/discuss packet (10 min)
• The process of obtaining goods and services to
satisfy your wants is called the want-satisfaction
chain.
The Want Satisfaction Chain
A
sandwich
on a bun
Grain
becomes
flour
Flour
becomes
bread
Bread is
delivered to
school
cafeteria.
Lunch is
served
Exit Ticket
• State 1 thing you learned about each of the
following: types of economies, supply & demand,
and types of businesses
• State 1 positive comment about the group project.
• State 1 thing you would change about the group
project.
Groups
• Create a chart or diagram describing the problems
or limitations that the US economy would
experience if the economic freedom you are
assigned were missing.
1. Freedom to compete
2. Freedom to own property
3. Freedom to buy and sell
4. Freedom of workers to compete for jobs
5. Freedom to earn profits
Pages 452-453
Turn to page 60…
• SM p. 60 – students determine the advantages &
disadvantages of various types of economic
systems (10)
Turn to
page 55
Households buy goods & services from
businesses & the government. Individuals
also provide businesses with labor & the
government with labor & taxes.
The federal government
buys products from
businesses & individuals
and provides services to
businesses & individuals.
Businesses produce goods &
services that are purchased
by households. Businesses
also pay wages to individuals
and taxes to the
government.
Factors of
Production ( FOP)
-Capital or Capital Goods---the
money or tools needed to produce
goods/services
-Land / Resources– the natural
resources needed to produce
goods/services
Factors of Production
-Labor– the work required to
produce goods/services
MENTAL & PHYSICAL!
• Entrepreneurs ARE NECESSARY!!!!
-Management—the decision making
process that is involved in
producing goods/services
Traditional Economy
-economy where people
supply most of the
goods and services they
use
-many things are done by
tradition
-does not allow for much
•If they produce more
economic growth
food than they need,
they trade the surplus, -changes are made slowly
(or extra food), for
-does not take advantage
goods made by others.
of technology
Advantages
-usually in places w/little
-fosters a sense of
technology
community
 It is based on
agriculture, fishing,
-low unemployment
hunting, gathering or
rate
some combination of
- Low crime rate
the these.
- Good for smaller
 It may use barter
countries
instead of money.

Third World countries
(Africa, Asia, Latin
America, Middle East)
Disadvantages
•make their own
clothing and tools
-few incentives for
entrepreneurs
-limits choices for
consumers
-lowers standard of
living
-not good for larger
countries
-
Command Economy
-economy where the
government controls
the factors of
production
-Government makes all
decisions
An economy where
supply and price
are regulated by
the government
EXAMPLE: Cuba and
North Korea
OPPOSITE
OF OURS!
Advantages
- Land and capital are
owned by gov’t.
- No competition
- All the same class
system (all would be
equal)
Disadvantages
-you have little if any
influence over the
economy
-govt tells producers
what to do (commands
it)
-term “communism”
refers to command
economics
-one class would rule
Market Economy
individuals make all
economic decisions
according to supply
and demand
-laissez-faire
economics – little gov’t
involvement
-also called free market,
free enterprise, or
capitalism
-competition and
supply and demand
determine the
economy-----the
invisible hand”
Advantages
-citizens, not the
govt’ own the
F.O.P.
Disadvantages
-rich get richer
• if you want to
start your own
-higher individual
business, or
freedom
buy/own a business
-businesses
you must have the
decide the what,
financial capital to
how and for
start and keep
whom…
your biz
-we decide what
we want to buy
-CHOICES!!
• $$$$$$
Mixed Economy
-a mixing together of
market & command
systems
-individuals have
economic freedoms
-government retains
some control for
benefit of citizens
-private ownership
& decision
making are
combined with
government
intervention and
regulations…
US is aka mixed
Advantages
- People can own their
own businesses.
-The government controls
the mail system.
-The government controls
most of the roads.
-Waste collection and
treatment are usually
provided as a service by
the local government.
-The FDA bans certain
medical drugs.
-The government has
created a minimum
wage law.
-Government provides
social welfare
payments to some
citizens.
-
Disadvantages
Goods and services go
to those with the most
money
-Business people can
control the market for a
good or a service, and
force consumers to pay
high costs or workers to
accept low income.
-Since the business
cannot always correctly
anticipate the desires of
consumers, at times
there will be an
overproduction of
goods and services
& an underproduction
of other goods and
services.
D55
Terrific Tuesday
April 28
Grading Period ends Friday, May 1!
Journal:
• How do different economic systems help satisfy
people’s needs? Be specific. Give at least 2
examples.
Groups: create review
games using key terms
Key Terms p. 450
D58
Wonderful Wednesday
April 29
Voc. Review Game – which group?
EducationPortal
• What is economics? Definition & types
• The Importance of Consumer choice in economics
Activity
• T-chart – List 5 wants and 5 needs.
Wants/Needs
EducationPortal
• Microeconomics Resources: scarcity & utility
Review: What factors combine to
create scarcity?
• Limited economic resources & society’s unlimited
wants
D59
Thankful Thursday
April 30
Voc. Review Game.
VOCABULARY QUIZ TOMORROW!
Political Cartoon Analysis
• “Concentration of the Country’s Wealth”
Journals:
• How could the way a business is organized affect
the experience of working there?
D60
Fabulous Friday
May 1
VOCABULARY QUIZ!
USA Test Prep
American Principles & Values – 5 parts
Government Structures – 5 parts
The Legal System – 8 parts
Retake until you get 100%!
D61
Marvelous Monday
May 4
In the news…
• Groups: “Decision Tree Activity” students are to
imagine that they are entrepreneurs preparing to
start their own business. They must decide if they
want to establish a sole proprietorship, a
partnership, or a corporation. (pros/cons) –
Handout “B”
Turn to page 61
Disadvantages of sole proprietorships
• The sole proprietor of the business can be
held personally liable for the debts and
obligations of the business.
• Risk extends to any liabilities incurred as a
result of acts committed by employees of the
company.
• All responsibilities and business decisions fall
on the shoulders of the sole proprietor. (you!)
• Investors won’t usually invest in sole
proprietorships.
Corporations
-Limited liability
-the ability of a corporation to
protect its shareholders by placing
only the amount of capital they
have invested at risk
-Incorporation---legal process of
forming a corporation through
state government
Disadvantages of NPOs
• Cost:
• Creating a nonprofit organization takes time, effort, &
money.
• NPOs are legal entities under federal, state, and local laws,
the use of an attorney, accountant costs $$
• Paperwork:
• Keep detailed records.
• Certain documents—articles of incorporation, bylaws, annual
reports, financial records—must be prepared in a specific
manner and filed with specified agencies by certain
deadlines.
• Shared control:
• Personal control is limited.
• A nonprofit organization is subject to laws and regulations, including its
own articles of incorporation and bylaws.
• In some states, the nonprofit is required to have several directors, who in
turn are the only people allowed to elect or appoint the officers who
determine policy.
• Scrutiny by the public:
• A nonprofit is dedicated to the public interest; so its finances are open to
EducationPortal
• Types of Assets: Money, stocks, & bonds (6:27)
DJIA – Dow Jones Industrial
Average
… is the most widely used indicator of the overall condition of the stock
market, a price-weighted average of 30 actively traded stocks, primarily
industrials. The 30 stocks are chosen by the editors of the Wall Street
Journal.
… is an important index that many people watch to get an indication of
how well the overall stock market is performing.
… is composed mainly of companies found on the NYSE.
Handout
• Analyzing Stock Ownership
NASDAQ
• The Nasdaq is also a term that can refer to two
different things: first, it is the National Association
of Securities Dealers Automated Quotations
System, which is the first electronic exchange,
where investors can buy and sell stock. Second,
when you hear people say that the "the Nasdaq is
up today," they are referring to the Nasdaq
Composite Index, which, like the DJIA, is a statistical
measure of a portion of the market.
• The Nasdaq Composite tracks approximately 4,000
stocks, all of which are traded on the Nasdaq
exchange.
Stock Market Activity
Using the netbook or your phone, check out the following
website or you can browse other stock-related websites:
www.money.cnn.com/data/markets/dow
Activity:
You have $10,000 to invest in the stock market. Decide which
stock(s) – at least 3 - you want to invest in. Graph your stock.
Keep up with this graph! You will be checking your stock and
graphing daily for the next 2 weeks.
D61
Terrific Tuesday
May 5
In the news…
Test on chapter 17, SM 55-61
Thursday
Check your stocks!
YouTube
• 14 year old investor on his way to…
Handout
• Graphing activity
Handout
• “Understanding the Market Mechanism”
3 Groups
• Create an informative visual on the type of business
you are assigned.
Chapter 17-2
Business organizations
What are some examples of sole proprietorships?
Small businesses such as gas stations, hair salons
Why do you think some small business owners might
set up a partnership instead of running the business
as a sole proprietor?
A business owner might not want to take on all of
the responsibility of running a business and prefer to
share it with others. A business owner might need
more capital to start a business, which could be
obtained from one or more partners.
Review of types of businesses
A type of business that is recognized as a
separate legal entity
• corporation
Shares of ownership in a corporation
• stocks
A company that controls all
production of a good or service
• monopoly
Corporate profits paid to
stockholders
• dividends
This is a method used by
corporations to borrow money
• Selling bonds
Every corporation has one of
these that answers to the
stockholders.
• Board of directors
These organizations include charities, scientific
research associations, and groups dedicated to
cultural and educational programs.
• Nonprofit organizations
This is the payment made to individuals
or banks for the use of their loaned
money
• interest
True or False
• The government will offset your loss if your small
business fails.
• False
True or False
• Big businesses are essential to our economy.
True
True or False
• State governments grant corporations the right to
operate and have laws on how to incorporate a
business.
True
True or False
• If a corporation goes out of business, its assets are
sold to pay off its debts.
True
True or False
A corporation’s board of directors manages daily
business operations.
False – corporate officers do
TRUE OR FALSE
• Nonprofit organizations are taxed by the
government.
FALSE
Fill in the blank…
• Corporation are owned by…
stockholders
You have purchased shares in a
company. What will happen if the
company fails?
• You will only lose the money you paid for the
shares of stock.
Fill in the blank.
• Loans to a corporation are called…
Bonds
Identify…
• Their job is to represent stockholders in making
decisions for the corporation
Board of Directors
In a corporation, who elect the
board of directors?
• stockholders
What happens to the price of a
stock when its company has very
high profits?
• The price of the stock will rise.
Who pays a business’s debts in a
failed sole proprietorship?
• The owner of the business
Chapter 17-3
Factors of Production: natural resources, capital,
labor, entrepreneurship
All countries make choices about production.
Every country must ask:
• What are we going to produce?
• How are we going to produce it?
• For whom are we producing it?
Natural Resources
A natural resource is considered a factor of
production only when some payment is necessary for
its use.
Ex: land
Capital
• Refers to the equipment you may need to operate your
business (the manufactured goods used to make other
goods & services).
• Includes tools, trucks, machines, office equipment, etc.
• “Financial capital” – refers to the money used to buy the
tools and equipment – the capital goods – used in
production.
• Where can you get financial capital? A loan from a bank or
the Small Business Administration (SBA), an agency of the
federal government that provides assistance programs for
small businesses.
• Capital could come from getting people to invest in your
business, or you could set up your business as a corporation
and sell stock to raise capital.
Entrepreneurship
• A person who organizes, manages, and assumes
the risks of a business
• They may come up with an idea for a new product
or a new way of doing business
• They put up their own labor or capital and take the
risks of failure in the hopes of making a substantital
profit
• Ex: Bill Gates
Labor
• Refers to human effort, skills, and abilities used to
produce goods and services; not just “workers.”
• Workers are paid hourly wages or salaries (fixed
earnings).
Why do you think the government
provides loans to businesses?
• Some business owners may not have the money or
be able to get a large enough loan through a bank.
Helping businesses be successful helps keep the
economy strong, which also benefits the
government.
D62
Wednesday
May 6
In the news…
Test on chapter 17, SM 55-61
Tomorrow!
Check your stocks!
Constructive Response
• Do you think the government should regulate
business? Why or why not? Be specific and provide
examples to support your answer.
Turn to page 56
Turn to Page 57
Utility
-the law Diminishing
of demand
says that
a lower price will increase
demand... but this is limited
-diminishing utility
-the amount of satisfaction
or usefulness of a product
Diminishing
Utility
decreases
as more
and more
are consumed.
-Ex.—You can only enjoy so
many soft drinks before you
can’t drink anymore ...no
matter the price you are
paying
INCOME LEVEL
CHANGES -The demand of many consumers
is based on their income level
aka purchasing power
-A change in either direction to a
person’s purchasing power will
change their demand for goods
and services
-personal income
An individual’s total earnings
from wages and investments
-disposable income
The amount of income left to an
individual after taxes have been
paid, available for spending and
saving.
Change in Consumers
-The number of possible
consumers in an area affects
demand
-Faster growth areas
may face higher
levels of demand–
• b/c of more people …
-Areas of the country who are
losing population will face
lower demand for goods• b/c of less people…
Consumer Expectations
-
Many consumers plan when
making economic choices and their
predictions for the future change
their demand.
-
A period of high unemployment or
economic boom can greatly change
the demand for certain goods.
Consumer Tastes
-Because consumers have many
choices of where to spend
their money, the popularity
of items will change demand.
-Advertisers spend billions
every year to shape the
“tastes” of consumers.
-Some items become high
demand items for a short
while and then very little
demand.
Substitute
Goods
-Substitute
goods
are
goods that can be
used in place of
another product
ex.—chicken or beef
-if a good experiences
a price change then
the substitute good will
face a demand
change
ex—chicken price
increases demand for
beef increases
Complementary Goods
-goods that work with
another product
Ex- peanut butter & ___
-a change in the
demand for one will
many times affect the
demand for the other
too!
Turn to Page 58
Law of Supply
-Supply
-the amount of a particular
good/service that producers will
supply at a given price
-Law of Supply
-as the price of a good/service
increases then producers will
supply more of the product and as
the price decreases they will
supply less.
Diminishing Returns
-The law of supply says that
producers will supply more at a
higher price but this is limited.
-diminishing returns
-The producer can only produce so
much of the product before its
cost is more than the profit
received from its sale.
-Ex.—You can only increase
factory production so far until a
larger factory is needed which
may be more costly than its worth.
Elasticity
-Elasticity
-Is the degree to which a change
in price affects the supply for
the product
-Elastic Supply
-a change in the price does
affect the quantity demanded –
easily able to produce more
-Inelastic Supply
-change in the price does NOT
affect the quantity demanded –
hard to produce more
Cost of Resources
-The cost of the materials that go
into goods and services can affect
the production costs which affect
the amount which can be supplied
at each price level
-Examples
-higher wages lowers supply
-cheaper resources increase
Company Expectations
-Producers as well as consumers
make economic plans. A company
that expects record sales or few
sales will adjust its supply levels
-Economic forecasts by the
government become very
important to large producers
Government Policy
-Governments can affect suppliers in
many ways
-More Regulations or fewer
regulations producers must follow
can affect supply levels
-Gov’t subsidies can help some
producers cut costs to increase
supply levels while fewer subsidies
cause production costs to rise
Taxation Policies
-Taxes—higher or lower taxes
affect the overall profit level
which determines supply
-lower taxes means greater profits
and more supply
-higher taxes means fewer profits
and less supply
Alternative Products
-Supply can also be affected by
other products that producers
could supply
-If price falls for one product then
they will supply less and shift
production to another type
product
Turn to page 59
Comparative Advantage
• Comparative Advantage
When one nation is better able to produce a good or service than
another nation.
• What causes the advantage???
• The ability of a country to produce a good at a lower cost than
another country can.
Ex: The US could make color TVs. Other countries, however, can make
them more efficiently (at a lower cost). As a result, the US buys many
color TVs made abroad.
• Having natural resources; ex: Saudi Arabia has huge deposits of oil
which allows it to export this oil.
• Having labor and capital; ex: US has large supplies of wealth, many
highly skilled workers & advanced technology so it can make
expensive products like airplanes & weapons.
Producing Goods
• Productivity is the amount of a good or service that can
be produced in a given time.
• What does Increased Productivity do?
Usually leads to higher wages, higher profits, lower prices
• What is the Effect of productivity on Inflation???
According to Keynes, moderate or creeping inflation has favorable
effect on production particularly when there are unemployed
resources in the country. Rising prices increase the profit expectations
of the entrepreneurs because the prices increase more rapidly than
the cost of production.
Specialization of Labor/Division of Labor
- Method of having workers do only a part of a
product but do it very efficiently
- Blue color labor – factory worker
- White color labor – office worker
Producing Goods
• Labor Intensive Work – job that requires a lot of
human effort and physical contact
• Are lower paying jobs
• Many labor intensive products are produced
overseas.
Mechanization – using machinery to make products
or provide services – called automation.
Machines sometimes take the jobs of people.
Machines increases productivity.
Producing Goods
• Interchangeable parts
• Mass production
• Assembly line
Growing Businesses
Law of Diminishing Returns
• Economic law that states that the level of return for
additional labor or work will decrease at some
point and continue to decrease.
What does this mean?
It doesn’t mean negative returns until the number of
workers exceeds the available machines or
workspace. In everyday experience, this law is
expressed as “the gain is not worth the pain.”
-
Study Guide
Jeopardy
Jeopardylabs.com/play/civics-chapter-175
Groups: USING YOUR PHONES…
• Research businesses in the US and identify local or
national businesses that you consider monopolies
or near monopolies.
Report to the class on what action has or should be
taken against them.
D54
Fabulous Friday
April 24
Test – State & Local Government
Icivics.org
• handouts
Vocabulary to learn
• 1-20 p. 470
• Groups: create a game to learn terms
D63
Thursday
May 7
In the news…
Test on chapter 17, SM 55-61
Tomorrow!
Check your stocks!
Study Guide
• Complete/go over
Test Review - Jeopardy
Groups
Chapter 18, Sections 1 & 3
You are responsible for learning the material in these
sections.
What you need to do:
1. Generate (write) notes for each section. (need a
copy for each member of your group and one for
me)
2. Write review questions w/answers for each
section. (need a copy for each member of your
group and one for me)
3. Create a presentation for each section that you
will present to the class. Be creative!