Transcript Chapter 02
LESSON
2-1
GOALS ECONOMICS AND DECISION MAKING
Describe the basic economic problem.
List the steps of the decision-making process. © SOUTH-WESTERN EDUCATIONAL PUBLISHING
The Basic Economic Problem
Scarcity
refers to the limited resources available to satisfy the unlimited needs and wants of people.
Economics
is the study of how people choose to use limited resources to satisfy their unlimited needs and wants. © SOUTH-WESTERN EDUCATIONAL PUBLISHING
Making Economic Decisions
Review
6
Define
1
Take
5
Identify
2 © SOUTH-WESTERN EDUCATIONAL PUBLISHING
LESSON
2-2
BASICS OF ECONOMICS GOALS
Describe how the market sets prices.
Explain the causes of inflation.
© SOUTH-WESTERN EDUCATIONAL PUBLISHING
Price-Setting Activities
Supply
is the relationship between the amount of a good or service that businesses are willing and able to make available and the price.
Demand
is the relationship between the amount of a good or service that consumers are willing and able to purchase and the price.
Market price
is the point at which supply and demand cross.
© SOUTH-WESTERN EDUCATIONAL PUBLISHING
Supply and Demand
$12 $10 $8 $6 $4 $2 $0 0 10 Demand Supply Market Price 20 30 40 Number of Tapes 50 60 70
© SOUTH-WESTERN EDUCATIONAL PUBLISHING
LESSON
2-3
ECONOMIC SYSTEMS GOALS
Name the three main factors of production.
Understand how different countries make economic decisions.
© SOUTH-WESTERN EDUCATIONAL PUBLISHING
Economic Resources Satisfy Needs
Natural resources also known as land Human resources also known as labor Capital resources also known as capital © SOUTH-WESTERN EDUCATIONAL PUBLISHING
Types of Economic Systems
Command Economies Market Economies Private property Profit motive Free, competitive marketplace Mixed Economies © SOUTH-WESTERN EDUCATIONAL PUBLISHING
LESSON
2-4
GOALS ACHIEVING ECONOMIC DEVELOPMENT
Describe the factors that affect economic development.
Identify the different levels of economic development.
© SOUTH-WESTERN EDUCATIONAL PUBLISHING
Development Factors
Literacy level Technology Agricultural dependency © SOUTH-WESTERN EDUCATIONAL PUBLISHING
Types of Development
Industrialized countries Less-developed countries Developing countries © SOUTH-WESTERN EDUCATIONAL PUBLISHING
Levels of Economic Development
Less-Developed Country
Low literacy Limited technology Agricultural or mining economy
Developing Country
Improving literacy Improving technology Decreasing dependence on agriculture or mining economy
Industrialized Country
High literacy Modern technology Industrial economy © SOUTH-WESTERN EDUCATIONAL PUBLISHING
LESSON
2-5
RESOURCES SATISFY NEEDS GOALS
Discuss economic principles that explain the need for international trade.
Identify various measures of economic progress and development.
© SOUTH-WESTERN EDUCATIONAL PUBLISHING
Economics of Foreign Trade
Absolute advantage
exists when a country can produce a good or service at a lower cost than other countries.
Comparative advantage
exists when a country can produce a good or service with more efficiency than other countries.
© SOUTH-WESTERN EDUCATIONAL PUBLISHING
Measuring Economic Progress
Measure of Production Gross domestic product (GDP) Gross national product (GNP) International Trade Activity Balance of trade Foreign exchange rate Foreign debt Other Economic Measurements Consumer price index (CPI) Unemployment © SOUTH-WESTERN EDUCATIONAL PUBLISHING