Louisiana: The History of an American State Chapter 3 Louisiana’s Economy: Resources and Rewards Study Presentation ©2005 Clairmont Press Chapter 3 Louisiana’s Economy: Resources and Rewards Section Section Section Section 1: 2: 3: 4: Basic Economic Concepts Louisiana’s Economic History Louisiana’s Resources Providing.
Download ReportTranscript Louisiana: The History of an American State Chapter 3 Louisiana’s Economy: Resources and Rewards Study Presentation ©2005 Clairmont Press Chapter 3 Louisiana’s Economy: Resources and Rewards Section Section Section Section 1: 2: 3: 4: Basic Economic Concepts Louisiana’s Economic History Louisiana’s Resources Providing.
Slide 1
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 2
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 3
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 4
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 5
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 6
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 7
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 8
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 9
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 10
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 11
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 12
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 13
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 14
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 15
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 16
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 17
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 18
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 19
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 20
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 21
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 22
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 23
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 24
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 25
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 26
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 27
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 28
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 29
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 30
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 31
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 32
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 33
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 34
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 35
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 36
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 37
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 38
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 39
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 40
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 41
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 42
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 43
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 44
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 45
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 46
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 47
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 48
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 49
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 50
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 51
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 52
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 53
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 54
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 55
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 56
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 57
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 58
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 59
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 60
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 61
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 62
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 2
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 3
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 4
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 5
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 6
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 7
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 8
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 9
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 10
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 11
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 12
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 13
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 14
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 15
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 16
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 17
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 18
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 19
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 20
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 21
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 22
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 23
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 24
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 25
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 26
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 27
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 28
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 29
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 30
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 31
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 32
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 33
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 34
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 35
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 36
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 37
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 38
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 39
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 40
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 41
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 42
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 43
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 44
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 45
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 46
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 47
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 48
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 49
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 50
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 51
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 52
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 53
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 54
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 55
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 56
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 57
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 58
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 59
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 60
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 61
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
•
•
•
•
Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
•
•
•
•
•
Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
•
Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
•
•
renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
•
•
•
•
•
50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
•
•
•
•
Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
Click here to return to Main Menu.
Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
•
•
Adds billions of dollars to the economy
Tourism
–
–
–
–
–
•
sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
–
–
–
1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
•
•
•
•
•
Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
Click here to return to Main Menu.
Click here to return to Main Menu.
Slide 62
Louisiana:
The History of an American
State
Chapter 3
Louisiana’s Economy:
Resources and
Rewards
Study Presentation
©2005 Clairmont Press
Chapter 3
Louisiana’s Economy:
Resources and Rewards
Section
Section
Section
Section
1:
2:
3:
4:
Basic Economic Concepts
Louisiana’s Economic History
Louisiana’s Resources
Providing Louisiana’s Goods and
Services
Section 1: Basic
Economic Concepts
ESSENTIAL QUESTION:
–How do people satisfy their wants
and needs in our economic
system?
Section 1:
Basic Economic Concepts
What words do I need to know?
1. goods
2. services
3. consumer
4. producer
5. natural resources
6. human resources
7. capital resources
8. scarcity
Section 1:
Basic Economic Concepts
9. opportunity cost
10. supply
11. demand
12. profit
13. traditional economy
14. command economy
15. market economy
Wants and Needs
• goods: physical items – food,
clothing, cars, housing, etc.
• services: activities people do for
a fee
• producer: person or business –
makes goods or provides a
service
Resources and Scarcity
• natural resource: gift of nature – part of
the natural environment, - water, trees,
minerals
• human resources: people – those who
produce goods & provide services
• capital resources: money & property –
used to produce goods and services
• scarcity: available resources – demand
greater than supply
Making Choices
• Scarcity vs. producers & consumers
• Unlimited needs vs. wants
• Limited resources vs. limited amounts of
goods & services
• Basis of an economic system
– choosing how to use resources
• Those making choices in United States
– individuals, businesses, & communities
Costs and Benefits
• Opportunity benefit
– Choices (getting a job vs. going to college)
– Immediate salary vs. getting an education
• Opportunity cost – cost of choice not
taken
• Other choices of opportunity benefits
& costs
– Using resources or using time
– Value of non-chosen alternative
Trade-Offs
•
•
•
Either/or choice: not always the
best
May combine parts of choices
as trade-off
Trade-off choices to get wants
& needs
Supply and Demand
• supply: quantity of a good or service
offered for sale
• demand: quantity of a good or service
consumers are willing to buy
– Lower prices: consumers buy more,
producers make less $ per item
– Higher prices: consumers buy less,
producers make more $ per item
• profit: amount left after costs are
subtracted from price (motivator for
producers)
Basic Economic Questions
Four basic economic questions:
1) What do we produce?
2) How can it be produced?
3) How much will it cost to
produce?
4) For whom will we produce?
What to Produce
• Making the necessary decisions
–Meeting needs & wants
–How to make the capital resource
(money)
–Human resources
–Natural resources
• Finally, deciding what to produce
How to Produce
•
Plan of action:
–
–
–
•
How to carry out plan
Process of implementation
Supplies needed
Overall production schedules:
–
–
When to start production
When to end production
How Much to Produce
• Items to consider for plan
–Time involved
–Resources needed
–Market demand for product (s)
and/or service (s)
• Decisions affected by scarcity
For Whom to Produce
•
•
•
•
•
Develop knowledge of consumers
Study needs of consumers
Consider supply & demand
Analyze & plan for competitors
Consider advertising
Economic Systems
•
•
economist: one who studies the
economy
Three basic kinds of economies
1.
2.
3.
•
Traditional Economy
Command Economy
Market Economy
Economy may function as combination
of all three
Traditional Economy
• Customs, habits, & beliefs determine and
answer the four basic economic questions
• Continues in the way it has always been
done
Command Economy
• The government …
controls the economy
answers the four basic questions
makes the decisions
has power & authority
negotiates input & output
controls competition
Market Economy
• Individuals…
Answer the four basic economic
questions based on supply &
demand
Also known as free enterprise
Based on private ownership
Freedom of choice
Click here to return to Main Menu.
Section 2: Louisiana’s
Economic History
ESSENTIAL QUESTION:
–What were Louisiana’s early
economic systems?
Section 2: Louisiana’s
Economic History
What words do I need to know?
1.
2.
3.
4.
5.
6.
barter
mercantilism
smuggling
indigo
tobacco
commerce
Louisiana’s Economic
History
• 1st economic system: barter (trading
goods & services without money)
• Then mercantilism: command
economy controlled by the
government
• Next, smuggling: illegal trade with
colonies of other nations
Louisiana’s Economic
History
• Louisiana Purchase:
– end of colonial period
– end of earliest crops tobacco & indigo
– beginning of agricultural market
• New market: sugar cane & cotton
• New Orleans:
– became a major port for North America
– 1801 described as “the grand mart of
business, Alexandria of America”
Louisiana’s Economic
History
• Early years of statehood: a continuing
agricultural economy
• 20 years before Civil War: a booming
economy
• End of Civil War till after WWII: a
struggling economy
• Growth and survival of war-developed
industries
Louisiana’s Economic
History
• New equipment & machines brought
by technology
• Human labor replaced by machines
• Many farms deserted by workers
• 1880 – 1920: most old growth trees
cut or gone
Louisiana’s Economic
History
• Oil (another resource)
– Became valuable in early 20th century
– Economy base changed by new industry
– Agricultural economy changed due to
WWII & demands for oil
– New economic direction:
interdependent global economy
– 21st century: seeks diversity & less
dependence on oil industry
Click here to return to Main Menu.
Section 3: Louisiana’s
Resources
ESSENTIAL QUESTION:
–What roles do natural resources,
capital resources, and human
resources play in the economy of
Louisiana?
Section 3: Louisiana’s
Resources
What words do I need to know?
1. mineral resources
2. nonrenewable
3. lignite
4. biological resources
5. renewable
6. pulpwood
7. labor union
Natural Resources
• Economy supported by abundant
natural resources
• Examples: air, water, & rich soil
• 21st century: agricultural shift from
small farms/plantations to huge
agribusiness systems
• Fewer people on farms
• Amount of crops not decreased
Natural Resources
• State ranking: 2nd in sugar cane &
sweet potatoes
• Vital crops: rice, cotton, soybeans
• Soil & climate good for raising beef &
dairy cattle (dairy farming diminished)
• Abundant water supply good for
agriculture, industry, human use,
transportation, & recreation
Mineral Resources
•
•
•
•
•
Oil
Natural Gas
Salt
Sulfur
Lignite
Mineral Resources
•
•
•
•
minerals: inorganic substances formed
by Earth’s geological processes
Important to Louisiana’s economy
nonrenewable: not replaced by nature
once extracted (taken) from the
environment
Mineral resources found in Louisiana
•
oil (“black gold”), natural gas, salt, sulfur, lignite
Construction resources in Louisiana
sand, gravel, limestone
Oil
• Oil for today’s energy created by decayed
plants from millions of years ago
• 10% of US oil reserves in Louisiana
• Louisiana: one of top oil-producing states
in United States
• 1901 – 1st oil well in Louisiana
• 1947 – 1st platform in Gulf of Mexico
• More oil deposits beneath Gulf of Mexico
Natural Gas
•
•
•
•
Larger deposits than oil
¼ of the nation’s supply
1st burned as waste
1917: “carbon black” developed
–used in making tires, ink, & more
• Important energy for homes &
industry
Salt
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Needed for human & animal survival
Used by Native Americans in trade
A form of money, later
Relied on by the Confederacy during
the Civil War
• Used in chemicals & other products
–polyvinyl chloride plastic
–PVC pipe for plumbing
Sulfur
• Major ingredient in:
• matches, gunpowder, medicine,
plastic & paper
• 1869 – “richest 50 acres in the world”
• town of Sulphur in Calcasieu Parish
• Decrease in value
• foreign import changed importance
• unprofitable to mine in Louisiana
Lignite
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Soft, brownish-black coal
Burns poorly
Mined since 1970s
Found mostly in DeSoto Parish
Used for electric power station
near Mansfield
Biological Resources
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Biological resources
– Common term: plants & animals
– Scientific term: flora & fauna
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renewable: replenish over time
Main divisions:
– Forests
– Wildlife
– Fish
Forests
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50% of Louisiana in forests
2nd largest income producer
90% pine trees
75% trees cut for pulpwood
Large trees cut for sawtimber
Forests
• Hardwood sawtimber used for
furniture & flooring
• Paper mills, lumber mills, &
plywood plants
• Christmas tree farms started by
the Office of Forestry in the LA
Dept. of Agriculture
Wildlife
• Variety of wildlife
–History of trapping & hunting tradition
• Economic resources
Fur pelts:
–Once sold more than a million pelts
annually
• Hunting regulations
–State Department of Wildlife and
Fisheries
Wildlife
• Hunting
• Source of food
• Recreation
• Millions of dollars for state’s economy
• Timber cutting
• Reduced forest land
• Forest animals decreased
• Increase in recent years
Wildlife
• White-tailed dear
–Population has increased
• Black bear
–Largest wild animal in Louisiana
–Endangered: not legal to hunt
• Wild turkey
–Classified as a game bird
–Efforts have been made to increase
its numbers
Wildlife
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Dove
Quail
Migratory waterfowl
Alligators
1963: placed on the federal protected
species list
1981: hunting under strict rules
Millions of dollars in hides & meat
Fish (Recreation)
• Freshwater bream, bass, perch,
catfish
• Game fish:
–trout, redfish, drum, mackerel, blue
marlin, amberjack, grouper, &
tarpon (illegal to sell commercially)
Fish (Commercial)
• Crawfish raised on crawfish farms
• Catfish sold: freshwater & farms
• Commercial fishing: tuna, sea
trout, red snapper
Capital Resources
• Human-made products used to
produce goods or services
• Examples: rice mills, sugar
refineries, oil refineries, cotton
gins, & meat-packing plants
• Others include: transportation
facilities – bridges, highways, &
airports
Human Resources
• People who supply the labor
– Physical or mental
– Paid for goods or services
• Requirements
– new skills & specialization
– education & training
• Labor unions – workers’ organization to protect
workers’ rights
• 1976 – right-to-work law passed – workers could
not be forced to join a union
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Section 4: Providing
Louisiana’s Goods and
Services
ESSENTIAL QUESTION:
–What is Louisiana’s place in the
global economy?
Section 4: Providing Louisiana’s
Goods and Services
What words do I need to know?
1. private goods & services
2. public goods & services
3. interdependent
4. Superport
5. tariff
6. economic indicators
7. gross domestic product (GNP)
8. consumer price index
9. inflation
10. unemployment rate
Providing Louisiana’s Goods
and Services
• free market: private goods & services
• Limited services & benefits to the
owners
• Provided by the government: public
goods & services
• Usually available to everyone
– highways, police, education, libraries
Manufacturing
Louisiana-made goods include…
• Ships, trucks, electrical equipment, glass
products, automobile batteries, & mobile
homes
• Chemicals industry
– Ranks 2nd in USA
– Petrochemicals (chemicals made from
petroleum)
– More than 100 chemical plants in LA
– Fertilizers & plastics
Manufacturing
• Billions of gallons of gas from
petroleum refineries each year
• Shipbuilding
–transport ships & merchant
vessels
–Coast Guard cutters, barges,
tugs, supply boats, fishing
vessels, & pleasure craft
Aerospace and Aviation
• Louisiana workers part of the
United States space program
• Space shuttles assembled in New
Orleans
• Lake Charles aircraft assembly
for military use
Biotechnology
• Combines biological research
with engineering
• Pennington Biomedical Center
leader in research
Service Industries
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Adds billions of dollars to the economy
Tourism
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sightseeing
eating
shopping
fishing & hunting
Mardi Gras
Movie-making
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1908 – 1st film made in Louisiana
1917 – 1st Tarzan film made
More recent – “Steel Magnolias”
Economic Institutions
• Joint effort to produce & sell goods and
services
• Groups known as economic institutions
• Include
– Businesses large and small
– Corporations: owned by investors, banks, &
labor unions
• Banks important: allow producers &
consumers to trade, save, & invest
Louisiana in the U.S. and
Global Economies
• 1st economic systems: simple barter
economies
• Today’s systems interdependent
– overlap
– producers & consumers rely on each
other
• Louisiana’s offshore port: Superport
Trade Policies
• North American Free Trade Agreement
(NAFTA) changes trade policies &
agreements
• Trade restrictions removed
• Foreign countries offer cheap labor abroad
• Companies moving abroad
• Tariffs lessened
• Imported goods & low prices hurting
Louisiana
Measuring the Economy
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Economic indicators
Gross domestic product
Consumer price index
Inflation
Unemployment rates
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