Economics

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Economics

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Vocabulary

• Economy-
• A system for producing, and distributing goods
  and services to fulfill peoples wants (needs)

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Vocabulary

• Capitalism -
• Free Enterprise or Free Market
• A type of economic system where the individual
  decides how goods and services will be produced
  and distributed
• Little to no government control of the economy

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Vocabulary

• Socialism-
• A type of economic system where the government
  controls the major industries in a country
  (electric companies, oil, health care)
• The government decides how these goods and
  services will be produced and distributed. Some
  private ownership is allowed.

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Vocabulary

• Communism-
• The government owns and controls all the
  production of goods and services
• There is no private ownership, everything is
  owned collectively by the people and the
  government decides who gets what and who can use
  what.

Cuban Flag
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Vocabulary

• Money-
• Anything that is accepted as payment for goods
  and services

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Vocabulary

• Supply-
• The amount of a product made and sold in an
  economy at a certain price

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Vocabulary
Demand- Amount of people who want to buy a good
or service at a certain price
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Vocabulary

• Securities, stocks and shares-
• Ownership in a business or corporation

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Vocabulary

• Buyer-
• A person who is willing to buy goods at a certain
  price

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Vocabulary

• Seller-
• A person willing to sell a good or service at a
  certain price

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Vocabulary

• Goods-
• Physical products that can be bought or sold
• Examples-- food, clothes, car

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Vocabulary

• Services-
• Work that you will pay another person to do for
  you
• Examples--fix your car, go to a doctor, take care
  of your yard

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Vocabulary

• Invest-
• To place your money into business, the stock
  market or other areas of the economy where you
  hope your money will make a profit

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Vocabulary

• Budget-
• A plan for how you will spend and save money

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Vocabulary

• Profits-
• The money you have left over after you subtract
  what it cost you to make something from what you
  were able to sell it for

Buyers cost - Sellers cost Profit
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What is an economy?

• An economy is a system for producing, and
  distributing goods and services to fulfill
  peoples wants (needs).
• You must have human wants in order to have an
  economy.
• Everyone wants something.

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Human Wants?

• 2 types of wants that an economy helps to
  provide
• Physical- food, water, oxygen, shelter, clothing
  
• Items that keep you alive.
• Emotional- love, feel good about yourself, happy.
  

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Factors of Production

• The resources that produce the goods and services
  that satisfy peoples wants.

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Factors of Production

• Land-
• Soil, minerals, water, animals, plants that grow
  on the Earth
• Basically, it is all of the Earths natural
  resources.

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Factors of Production

• Labor -
• The time and energy it takes people to produce
  goods and services

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Factors of Production

• Capital-
• Is anything that can be saved and used to produce
  other goods and services
• Examples- tools, machinery, or money

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Test Yourself

• An ______________ is a system, in which goods and
  services are produced, and distributed to satisfy
  peoples wants.
• 2. Name the three (3) factors of production.
• 3. The three factors of production are combined
  together to make _____________ and ______________
  to satisfy peoples wants.

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Test Yourself

• An ECONOMY is a system, in which goods and
  services are produced, and distributed to satisfy
  peoples wants.
• 2. Name the three (3) factors of production.
  LAND, LABOR AND CAPITAL
• 3. The three factors of production are combined
  together to make GOODS and SERVICES to satisfy
  peoples wants.

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Types of Economies

• Traditional
• Command
• Socialism
• Communism
• Market
• Capitalism
• Mixed

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Types of Economies

• Traditional
• An economic system based on traditions and
  customs
• Most traditional economies are found in less
  developed countries of the world.

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Types of Economies

• Command
• The government or central authority decides how
  the factors of production will be used
• Many command economies are found in
  dictatorships.

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Command Economy

• This theory was started by Karl Marx and
  Friedrich Engel and includes
• Communism
• All factors are owned by the government
• 2. Socialism
• Wealth should be distributed equally

Karl Marx ?
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Types of Economies

• 3. Market
• In this type of economy private individuals
  decide how the factors of production are used,
  and how goods and services are produced and
  distributed.
• There is little or no government control of the
  economy.
• It is based on competition for profits.

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Types of Economies

• 4. Mixed
• A combination of different types of economies
• Examples- Capitalism and Socialism

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Test Yourself

• 1. ___ One of the two creators of
  communism A. Adam Smith
• B. Traditional
• 2 . ___ This type of economy has little or no
  private C. Karl Marx ownership of property,
  and the factors of
• production D. Communism
• are owned collectively. E. Social ism
• F. Capitalism
• 3. ___ How the factors of production are used
• in this type of economy are based on customs
  and traditions
• 4. ___ Author of The Wealth of Nations.
• 5. ___ Type of economy where the government
  controls the
• major industries in the country and provides
  many services
• for the people, but this comes with very high
  taxes.
• 6. ____In this type of economy the individual
  controls
• the factors of production and decides how they
  will be used.
• 7. Why is America considered a mixed economy?

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Test Yourself

• 1. C One of the two creators of
  communism A. Adam Smith
• B. Traditional
• 2 . D This type of economy has little or no
  private C. Karl Marx ownership of property,
  and the factors of
• production D. Communism
• are owned collectively. E. Social ism
• F. Capitalism
• 3. B How the factors of production are used
• in this type of economy are based on customs
  and traditions
• 4. A Author of The Wealth of Nations.
• 5. E Type of economy where the government
  controls the
• major industries in the country and provides
  many services
• for the people, but this comes with very high
  taxes.
• 6. F In this type of economy the individual
  controls
• the factors of production and decides how they
  will be used.
• 7. Why is America considered a mixed economy?
  ALTHOUGH WE ARE PRIMARILY A MARKET (CAPITALISM)
  ECONOMY, WE HAVE SOME SOCIALISM IN THE FORM OF
  WELFARE AND SOME OTHER PUBLIC SERVICES.