Economic Process and Systemsstmarksmiddleschool.weebly.com/uploads/5/7/5/8/... · List and analyze...
Transcript of Economic Process and Systemsstmarksmiddleschool.weebly.com/uploads/5/7/5/8/... · List and analyze...
EconomicProcessandSystems
5.2-5.3
BellRingerPage:59
Nameyourfavoriteclothingstoreandexplainwhyyoulikeitsomuch.1.Whatisthestore’sspecialty?2.Canspecializinghurtastoretoomuch?
Beginnotesonpage59andextendonto61
LearningObjectives:Iwillbeableto…
Examinetheexchangeofgoodsandservicesandtheissuesaffectingprofit.
Listandanalyzethefourtypesofeconomies.
Debatecommandandmarketeconomies.
Market
Anorganizedsystemwhereproducersandconsumersexchangegoodsandservices.
1.Howdidpeopleusetoexchangegoodsandservicesbeforeacurrencywasused?
Currency
Agovernmentissuesmoneyintheformofpaperbillsandmetalcoins.
Differentcountriesusedifferentcurrencies.Inordertotradeeachcountrymustestablishavaluefortheircurrenciesandasystemforexchangingdifferentcurrencies.
Profit
Themoneyleftoveraftersubtractingthecost ofdoingbusiness.LaborRentMaterials
Companieswanttodecreasecost andincreaserevenues.
Revenue=themoneyearnedaftersellinggoodsorservices.
NonprofitOrganizations
Businesslikeinstitutionsthatdonotseektomakeaprofit.ChurchesMuseumsHospitals
Competition
Profitsareaffectedbycompetition inthemarketplace.
Competition=thestruggleamongproducersforconsumerbusiness.
Companiescompeteby…1.loweringprices2.specializing3.advertising
Specialization
Companiescanincreasetheirprofitandrevenuebyconcentratingonalimitednumberofgoodsorservices.• HalloweenStores• Scentsy Stores
HealthyEconomy
Ahealthyeconomygrows ascompaniesproduceandsellmoregoodsandservices.
Whenpricesincreaseovertime,thisisreferredtoasinflation.
***Economiesdonotgrowforever!
Economicactivitiesfallasdemandfallsleadingtounemployment.Ifthisdeclinelastsformorethan6months,itisreferredtoasarecession.
ChecksforUnderstanding
1. Howdoescompetitionaffectproducersandconsumers?2. Howdoesinflationaffectprices?3. Howdoesrecessionaffectprices?4. Whatisthedifferencebetweenprofitandrevenue
EconomicSystems
Everysocietyhasaneconomicsystem.
4BasicEconomicSystems1.Traditional2.Market3.Command4.Mixed
TraditionalEconomy
• Decisionsbasedoncustomandhabit.
• Wantsandneedsaresatisfiedthroughhuntingandfarming.
• Donotwanttochangetheirbasicwayoflife
• Uncommonintoday’ssociety
MarketEconomy
• Individualproducersandconsumersmakeeconomicdecisions.• Referredtoascapitalismorfreemarket• Encouragesentrepreneurshipbygivingpeopleeconomicfreedom.• Really…nosuchthingasapuremarketeconomy.
CommandEconomy
• Centralgovernmentmakesalleconomicdecisions.• Alsocalledacentrallyplannedeconomy.• Individualproducersandconsumersdonotmakebasiceconomicdecisions.• Nosuchthingasapurecommandeconomy.
MixedEconomy
• Mostsocietieshavemixedeconomieswithvaryinglevelsofgovernmentcontrol.• Combineselementsoftraditional,marketandcommandeconomicsystems.• Governmentmakessomeeconomicdecisions.(U.S.A.andAustralia)• Passinglawstoprotectconsumerrights.• Governmentstaxcompaniesandinfluenceeconomicgrowth.
• Governmentownsandcontrolsmostbusiness.(N.KoreaandCuba)
ChecksforUnderstanding
1. Whatarethedifferencesamongtraditional,commandandmarketeconomies?
2. Whataretheadvantagesofafree-marketsystemusedintheUnitedStates?
3. Doyouthinkgovernmentinvolvementintaxingconsumersandproducersisnecessaryinamixedeconomy?
• https://www.youtube.com/watch?v=B43YEW2FvDs
“DebateandDefend”BrainstormPage58
Completethe“DebateandDefend”brainstormactivityandbepreparedtodefendanddebateeitheraCommandEconomyorMarketEconomytomorrow.