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Economics: Part 1

Economics: Part 1. …the study of the choices people make to satisfy their needs and wants. MICROEconomics is…. …the study of the choices countries make in order to satisfy their needs and wants. MacroEconomics is…. …the way a country produces and exchanges goods and services.

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Economics: Part 1

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  1. Economics: Part 1

  2. …the study of the choices people make to satisfy their needs and wants. MICROEconomics is…

  3. …the study of the choices countries make in order to satisfy their needs and wants. MacroEconomics is…

  4. …the way a country produces and exchanges goods and services. There are four types of economic systems: traditional, command, market and mixed An Economic System is…

  5. Goods and Services are traded without exchanging money. Also called “barter”. Traditional Economy

  6. Production of goods and services is determined by the demand from consumers. Examples: Free Enterprise Capitalism Market Economy

  7. Production of goods and services is determined by a central government, which usually owns the means of production. Example: Communism Command Economy

  8. A combination of command and market economies provides goods and services so that all people will benefit. Examples include combinations of mixed and command economies. Mixed Economy

  9. Goods – Things we can touch or see that satisfy our wants or needs. • Services – Actions people undertake in order to satisfy their wants and needs. Economic systems:Satisfy needs and wants with…

  10. Resources - A country’s access to and use of resources has a major impact on its economic development. • Development requires access to raw materials, such as minerals and trees, that can be turned into useful products. • Development also requires energy resources such as coal, oil, water, natural gas, or uranium to operate factories. Economic indicators:

  11. Businesses use three types of resources to produce goods and services. Natural Human Capital

  12. Resources that are present without human interference. • They are “gifts of nature”. • Examples include land, timber and mineral deposits. Natural Resources

  13. Any human effort used to produce goods and services • Examples include workers, their skills, training and education Human Resources

  14. Include the “tools of production” which are any of the goods used to produce other goods/services. • Examples include tools, machinery and buildings. • Money used to purchase these resources is also a capital resource. Capital Resources

  15. cotton tractor marketing degree table saw computers water driver’s license crude oil employees factory building aluminum electrician’s license land Identifying Resources: NATURAL HUMAN CAPITAL

  16. New technologies create new demand for resources. Examples Steam Engine Demand for Coal Internal Combustion Machine Demand for Gasoline (Cars and trucks) (petroleum) Computer Chips Demand for Skilled Workers *Note on REsources

  17. Because resources are not distributed equally on earth, countries must TRADE with one another. More on trade later. *Note on Resources

  18. Market Sectors – Economic activities can be divided into four categories or sectors. • Primary • Secondary • Tertiary • Quaternary Economic indicators:

  19. Businesses involved in gathering raw materials. • Examples include agriculture, mining and forestry companies. Primary Activities

  20. Businesses that take goods made in primary industries and change the goods into products that are useful to consumers. • Examples include automobile manufacturers and textile factories. Secondary Activities

  21. Companies that provide business or professional services to consumers. • Examples include salespeople, teachers and doctors, banking, insurance. Tertiary Activities

  22. Businesses that use skilled professionals to process information. • Examples include information research, management, and administration companies. Quaternary activities

  23. Market Sectors can be used to measure a country’s level of economic development. The more industrialized a country is, the more developed its economy. • Poorest countries have no industrialization (primary and secondary). • Next poorest countries are industrializing (primary and secondary). • Wealthier countries are postindustrial (tertiary and quaternary).

  24. _____ Hershey Chocolate Company _____ Pilot Gas Station _____ Luck Stone Corporation _____ NTelos _____ Law Well Drilling Inc. _____ Fry Appraisal Co. _____Oak Lawn Cemetery _____ Walmart _____Augusta Health _____ Hollister Manufacturing Identifying Levels of Activity

  25. The more developed an economy is, the greater the number and variety of market sectors you will find. *Note on market sectors:

  26. Gross National Product or GNP – Gross national Product is the total value of goods and services produced by a country in a year, both inside and outside. Gross Domestic Product or GDP – Gross domestic product includes only those goods and services produced within a country and does not include income earned outside that country. Economic Indicators:

  27. GDP Per Capita – A country’s GDP divided by the number of people in that country. • Per capita income is often used as an average income, a measure of the wealth of the population of a nation, particularly in comparison to other nations. • Per capita income is often used to measure a country's standard of living. Economic indicators:

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