Chapter 3Louisiana’s Economy

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EconomicConcepts

Louisiana’sEconomicHistory

Louisiana’sModern

Economy

Louisianain the

World Economy

EconomicVocabulary

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What basic economic concept requires consumers and

producers to make choices with their limited

resources?

scarcity

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What are the two consequences each

time individuals, families, businesses, or governments make an

economic choice?

Opportunity cost and opportunity

benefit

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What are three things that impact consumer demand?

A consumer must:

1. Want something

2. Have the ability to pay for it

3. Be willing to pay for it

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Why has the price of flat screen TVs

decreased over the last 10 years?

The supply has increased

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How is a rise in the Consumer Price Index

(CPI) related to consumer buying

power?

A rise in the CPI decreases consumer

buying power

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When the first Europeans arrived in Louisiana they helped the Natives move

from a traditional economy to one based

on ________.

commerce

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Why did mercantilism fail in colonial

Louisiana?

Neither France nor Spain could provide

enough trade goods to meet the needs of the

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Why did Louisiana change to a market economy in the

early 1800s?

Louisiana began exporting large

quantities of cotton and sugar

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How did the Mississippi River contribute to the development of

Louisiana’s market economy in the 1800s?

Producers and consumers from

other states used the river to reach the port at New

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How is this diagram

connected to Louisiana’s

manufacturing history?

The military success of Higgins’ boat design led to the development of

sevenfactories and 20,000 jobs

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What is the main difference between

using pine as sawtimber and oak as

sawtimber?

Pine trees are mostly turned into pulpwood

and oak is mostly used in furniture, flooring, and kitchen cabinets

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What wildlife species brings more than $40 million into Louisiana?

alligators

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Timber, alligators, fish, shrimp, crabs, and

oysters are all examples of what type of

resource?

Biological/Renewable Resources

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Despite having a great deal of risk, Louisiana’s

economy is largely dependent on what two

nonrenewable resources?

oil and gas

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What two resources are needed to

transform a resource into a good or

service?

Capital resources and human resources

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How is agribusiness different from

farming in the past?

Fewer people are farming but

production remains high

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What service industry brings the most money into

Louisiana?

tourism

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What explains why Louisiana is working

to diversify its economy today?

The price of oil can rise and fall dramatically

making profits unpredictable

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What was a direct result of the 2002 tax

incentives for film production?

The film industry in Louisiana grew

rapidly

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Which explains one of the costs of passing the right-to-work law

in 1976?

Having fewer union members reduces the

bargaining power of the group

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How do tariffs protect producers in the

United States?

They make imported goods more expensive

for consumers

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How did The North American Free Trade Agreement’s (NAFTA)

decision to remove trade restrictions with Mexico

affect Louisiana?

Because labor is cheaper in Mexico,

several textile factories left Louisiana

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How do New Orleans and Baton Rouge help Louisiana in a global

economy?

These two cities have 2 of the nation’s top

5 deep water ports

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What is unusual about the super port off the

coast of Lafourche Parish?

It is dedicated to transporting oil and gas from ships too large for

other ports

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Why would rice and sugar farms support

tariffs?

These farmers depend on tariffs to compete with

other countries that can grow these items more

cheaply

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What are capital resources?

tools used to produce

commodities

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What are the characteristics of a command economy?

government directed decisions about

resources

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How does a market economy differ from a command economy?

Producers and consumers are free to answer the four basic economic questions

without government involvement

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Give an example of an economic institution.

banks, corporations, savings and loans,

small businesses

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What is one of the most important economic

indicators that measures the value of goods and services produced in the

USA?

Gross Domestic Product (GDP)

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Make your wager on the scoreboard

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Final Question

What would make a worker’s spending

power decrease even if he/she still made the

same wages?

inflation

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