Chapter 3- Lesson 2

Chapter 3- Lesson 2Trade Then and NowPgs. 72-79

FOCUS ON THE MAIN IDEA

People trade for the goods and services that they need and want.

Vocabulary Wordsneed-something that a person must have to live.want- something that a person would like to have, but can live without.barter- to trade one kind of goods or services for another.producer- people who make goods or products to sell.consumer- a person who buys goods or services.economy- the resources of a country, state, region, or community and how the resources are managed.7. free enterprise system- a system in which businesses have the right to produce any good or service that they want.profit- the money left over after costs are paid.supply- the amount an item someone has to sell.demand-the amount of an item that consumers are willing to pay at different prices.opportunity cost- what is given up when one thing is chosen over another.Trading for Needs and Wants

Early in the history of the United States, people traded for the goods and services that they needed and wanted.In the early 1800s, St. Louis, Missouri, grew because people came there to trade for fur.

In ancient times, people used shells, stones, and round metal disks as money. A person who was willing to sell something exchanged that good or service for a certain number of the shells, stones, or metal disks. In time, however, people relied less on bartering as a way of trading.Using Money

The use of money goes back thousands of years.2,500 B.C., the early Egyptians used tiny bars of metal as money.700 B.C., Greek cities produced flat pieces of metal with a picture or design on them.The Chinese came up with the idea of paper money about 1,400 years ago because they had a shortage of metal.Today most people use paper money, metal coins, and checks as money.REVIEW QUESTIONS

Describe a time when you have bartered with a friend.Tell the difference between a producer and a consumer.Make a list of wants vs needs.MONEY IN THE UNITED STATES* The British colonists in America made their own coins and paper money. They used beads and tobacco leaves as money.The 1793 copper cent and the 1794 silver dollar were among the first coins made by the U.S. government.After gold was discovered in California in 1848, miners used gold dust and nuggets as money in mining camps.Today, most U.S. coins have the image of a U.S. president on them. George Washington is on the quarter, Franklin D. Roosevelt is on the dime, Thomas Jefferson is on the nickel, and Abraham Lincoln is on the penny.

11FREE TRADEThe U.S. economy is based on the free enterprise system.The government does not tell businesses what they can produce or sell.People or businesses decide what they want to make and sell.Not every country in the world has a free enterprise system.Some governments choose which businesses can provide certain goods or services.In a free enterprise economy, businesses operate on a system of supply and demand.If the demand is great and the supply is low, the price for the product goes up.REVIEW QUESTIONS

1. How is an economy based on a free enterprise system different from one that is not?

How might an increase in supply benefit a customer?

FACING THE FUTUREWe can all contribute to our nations economy.If you buy something, you are a consumer.Every time you buy something, you make a contribution to the economy of the U.S.When you start working, you will help the economy by producing goods or services.

THINK ABOUT IT

What do you want to do when you grow up?What are some ways that you can prepare yourself for what you want to do?

15LESSON SUMMARY

1. Goods and services have been traded by barter and money.Our free enterprise system is based on supply and demand.You can help the economy when you are a careful producer and consumer.REVIEW QUESTIONS

How does a business make a profit?What is the difference between supply and demand?How were goods and services traded by barter?How have computers affected the economy of the United States?LINK TO READING

Read the story of Jack and the Beanstalk. Tell your partner what Jack got in return for his mothers cow. Decide if Jacks trade was a good one or a bad one.Explain why you think so.