SS9 ECONOMICS 101 – The Short Version
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Transcript of SS9 ECONOMICS 101 – The Short Version
SS9 ECONOMICS 101 – The Short Version
Student Notes…Pay Attention!
This family has anECONOMIC PROBLEM!
WHY?
I need new pom-poms!
I want a new snowboard!
Don’t these kids know that money doesn’t grow
on trees?!
Meet the NormalFamily:
Because WANTS are UNLIMITED and RESOURCES are LIMITED!
3 Types of Resources
• NATURAL RESOURCES: soil, fish, minerals, etc.
• HUMAN RESOURCES: people and their skills and knowledge
• CAPITAL RESOURCES: money or anything that can be used as collateral to get money (property, rare metals, etc.)
RESOURCES are known as FACTORS OF PRODUCTION (FOP) in ECONOMICS
(meaning you need all three in order to produce goods and services)
NATURAL RESOURCES = LAND
HUMAN RESOURCES = LABOUR
CAPITAL RESOURCES = CAPITAL
LAND + LABOUR + CAPITAL = FOP
A LIMITED SUPPLY of any RESOURCE (or FOP) is called SCARCITY.
EVERY society deals with SCARCITY. The way a society deals with scarcity defines its
ECONOMIC SYSTEM.
Other Words for Scarcity?
• Shortage• Deficit• Shortfall• Decreased Amount• Rare• Few• Limited
The 3 Basic Economic Questions (3BEQs)(how a society attempts to deal with scarcity)
• What is needed or wanted?
• How will it be produced?
• Who will get it?
How these questions are answered determines a country’s economic system. Sometimes the government makes the decisions, sometimes it doesn’t. For example:
The Economic Continuum
Left Center Right
Communist
Centrally Planned
Totalitarian
Planned
Socialist
Mixed
Modified Market
Capitalist
Market
Free Enterprise
Laissez Faire
Left (Planned)
• gov’t answers 3BEQs• gov’t owns and manages FOP• gov’t plans what will be produced • gov’t decides how to use
resources• individuals have little influence on
gov’t decisions• consumers have no say in
economy
Centre (Mixed)
• combines private ownership and gov’t control to answer 3BEQs
• private businesses own and manages some FOP• gov’t owns and manages some FOP (CROWN
CORPORATIONS)• gov’t control of economy varies depending on who
is in power• consumers have some say in economy
Right (Market)
• private business and consumers answer 3BEQ• private businesses own and manage FOP• consumers determine what is needed or wanted• producers meet consumer demand• business succeeds if they produce what consumers want• no gov’t involvement in business
ECONOMIC SYSTEMS can SHIFT LEFT or SHIFT RIGHT depending on social and political factors
affecting the economy, such as VALUES, STANDARD OF LIVING and QUALITY OF LIFE.
What do Economic Systems Value?
• The PUBLIC GOOD is about what’s BEST for society as a WHOLE. Governments differ on how to achieve it.
• COOPERATION: set aside individual interests to meet the needs of the group; recognizes needs and circumstances; values EQUITY
• INDIVIDUALISM: what’s best for individuals will add up to what’s best for society; values creativity and INDEPENDENCE.
There are extremes at either end of the continuum. Can you think of some examples of other countries we can place on the continuum?
Shanghai ChinaMexicoRussiaBritain
North Korea
LET’S COMPARE:
CANADA’S ECONOMY“Peace, order, and good government”
• reflects idea of cooperation• gov’t makes economic decisions on behalf of citizens• MIXED because citizens, business and gov’t make economic
decisions• Gov’t operates Crown Corporations when it is in the public
interest to do so because:– it’s too expensive for private business to operate, or, – the population is too small for the business to be profitable for an
individual or company
LET’S COMPARE: cont.
USA’S ECONOMY“life, liberty, and the pursuit of happiness” • spirit of individualism based on history of independence• values individual economic decision-making; gov’t does not like
to intervene• market forces determine economy• works through forces of competition and the idea of supply
and demand• federal gov’t only controls necessary services (some social
supports, postal service, some healthcare
CANADA’S ECONOMY“Peace, order, and good government”
SHIFT LEFT• universal healthcare• Canada Pension Plan for seniors• establish Crown Corporations Air Canada, CBC,
Via Rail, Canada Post, AGT
CANADA’S ECONOMY“Peace, order, and good government”
SHIFT RIGHT• cuts in gov’t spending• privatize crown corporations (Air Canada, Via
Rail, AGT=Telus)• NAFTA increases influence of market in
economy
USA’S ECONOMY“life, liberty, and the pursuit of happiness”
SHIFT LEFT• Old Age Security for seniors• Farm support (subsidies)• Public works projects (roads, dams, bridges…)• USPS
SHIFT RIGHT• reduced gov’t spending• reduced regulations/rules on trade
USA’S ECONOMY“life, liberty, and the pursuit of happiness”
What are some of the things people living in either country might value in terms of STANDARD OF LIVING and QUALITY OF LIFE? Let’s make a comparison:
What could be considered NEEDS? WANTS?
Coming up next:
• What is the relationship between SCARCITY and SUPPLY and DEMAND?
• What role does COMPETITION play in an economic system? What is the relationship between SCARCITY and COMPETITION?