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ECONOMIC$. Studying how people use their resources. Average Salary based on Education. Jack and Jill. Jack and Jill live on an island. Everything on their island is an asset. Asset —Something that can be used by people for a purpose .

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Economic

ECONOMIC$

Studying how people use their resources



Jack and jill
Jack and Jill

  • Jack and Jill live on an island. Everything on their island is an asset.

  • Asset—Something that can be used by people for a purpose


  • In order to improve their standard of living Jack and Jill decide to do different jobs.

  • Standard of Living—The level of comfort in everyday life


  • Jill demands firewood, because she doesn’t like to work hard (It messes up her nails)Jack agrees to supply firewood.

  • Demand—the amount of an asset people want

  • Supply—the amount of assets available


  • Jack demands new clothes, because he ruins all of his cutting firewood. Jill agrees to supply clothes.

  • Demand—the amount of an asset people want

  • Supply—the amount of assets available



Traditional economy
Traditional Economy

  • Traditional economies are when people trade one asset directly for another.







  • Jack cuts a lot of firewood.  The doesn’t supply of firewood is high.  Only Ringodemands Jack’s firewood.  The demand is low.  Jack only gets one seashell for a stack of firewood.


  • Jill makes a really nice shirt.  Everyone doesn’t demands Jill’s nice shirt.  The demand is high.  There is only one shirt.  The supply is low.  Nice shirts are very scarce.  Ringo, Jack, and Paul bid against each other for the nice shirt.  Jill ends up selling the shirt for 25 sea-shells..

    Scarcity—How much or little of an asset there is. The more scarce (low supply), the higher the price.


Market economy people are free to trade goods as they choose
Market Economy- doesn’t People are free to trade goods as they choose.


Command economy
Command Economy doesn’t

  • John moves to the island.  John declares he is now the dictator of the island.  John makes Jack get coconuts, Ringo now gets the firewood, and Paul and Jill are forced to start building a new house for John.  Nobody gets to choose what they do.  They now live in a command economy.


Command economy the government controls everything that the people make and what they have to make
Command Economy doesn’t -The government controls everything that the people make and what they have to make.


Medium of exchange
Medium of Exchange doesn’t

  • Why would currency be considered a medium of exchange?


Circulation
Circulation doesn’t

  • The total amount of currency available

  • Other types of circulation


Inflation
Inflation doesn’t

  • Why can’t we just print money?


Inflation1
Inflation doesn’t

  • Why can’t we just print money?

    • Assets prices change when inflation changes, so that it still costs the same amount of the pie. In other words:

    • Before inflation: After Inflation:

      Car costs $10,000 Car costs $20,000

Amount of $$ x2


Inflation2
Inflation doesn’t

  • Inflation is the general increase in the cost of all assets due to the rise in the amount of currency in circulation.


  • http://mpe2013.org/images/climate-system-ocean-circulation doesn’t /

  • http://bioweb.wku.edu/courses/Biol115/Wyatt/Anatomy/Heart/circulation.htm

  • alwaysarocker.blogspot.com

  • http://www.free-bullion-investment-guide.com/price-inflation.html

  • http://www.free-bullion-investment-guide.com/price-inflation.html


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