economics is… - ed cash durango high school · scarcity all economic ... . ......
TRANSCRIPT
Economics is…THE STUDY OF HOW HUMANS
MAKE DECISIONS ABOUT
RESOURCES THAT HAVE
ALTERNATIVE USES.
RESOURCES INCLUDE CAPITAL
(WEALTH USED TO INVEST IN
BUSINESS), LAND, RAW
MATERIALS, AND LABOR.
What do you know about
economics?
How do economics
work in your personal life?
Provide one example to support your ideas.
How do economics
work in American national life?
Provide one example to support your ideas.
How does economics
work internationally?
Provide one example to support your ideas.
-Factual Question: What are the
characteristics of all economic
systems?
-Conceptual Question: What is the greatest good for society? (Stroll/Think/
Pair/Share)
Debatable Question: What economic system provides the greatest good for the greatest number?
Scarcity
All economic systems
must deal with scarcity
Scarcity is when…..
Human wants and needs are
unlimited.
Resources are limited…………
So, people must make choices,
as seen in the next four
questions.
http://www.seeing-stars.com/OC/Julie&CalebMansion(400).jpg
Scarcity
All economic systems
must deal with scarcity
Scarcity is when…..
Human wants and needs are
unlimited.
Resources are limited…………
So, people must make choices,
as seen in the next four
questions.
https://medium.com/theglobalvoice/the-singer-solution-to-world-poverty-9deb1b4c810
Question #1:
What will be
produced?
http://regmedia.co.uk/2007/12/12/787_production_line.jpg
Question #2:
How will it
be
produced?
http://www.sonofthesouth.net/leefoundation/civil-war/1862/november/salt-factory.jpg
Question #3:
For whom
will it be
produced?
http://www.ou-kosher.net/images/elements/homepage_consumer_1.jpg
WHO DECIDES HOW TO
ANSWER QUESTIONS 1-3? WHO
OR WHAT DO YOU THINK
SHOULD?
THE INVISIBLE HAND,
ENTREPRENEURS, WORKERS,
CONSUMERS, THE
GOVERNMENT, SOCIETY,
OTHERS?
How to make economic
choices:
Incentive:
a benefit that encourage people to act in certain ways.
http://www.areadevelopment.com/taxesIncentives/Feb09/incentives-negotiation-stateBudgets-closingFunds001.shtml
How to make economic
choices:
Economize:
The best combination of costs and benefits.
http://divisionoflabour.com/archives/2007_11.php
How to make economic
Choices:
Opportunity
Cost:
what it costs
to pursue one
thing over
another…
Before the Enlightenment…
People believed in
mercantilism:
there was a limited
amount of wealth in the
world
nations should control
trade with laws and
colonies to make sure
they most of the world’s
wealth
http://www.feedyourbottomline.com/pics/costs/pie.jpg
Supply and Demand
Supply:
Goods or
services
businesses or
governments
produce.
Demand:
What
consumers or
citizens
desire.
Means of Production
The means of
production
are the
resources
needed to
produce
goods and
services…..
raw materials,
tools, labor,
capital
wealth, etc.
http://www.csa.com/discoveryguides/envecon/images/land.jpg
Introduction to Trade in
Period 4:
Slavery: Identify economic
terms in the video as you
watch.HTTPS://WWW.YOUTUBE.COM/WATCH?V=3NXC4Q_4
JVG
Adam Smith
Capitalism has been around for some time, but it was “scientifically” explained by Adam Smith in The Wealth of Nations written in 1776.
Smith talked about the invisible hand of the market that actually creates wealth.
http://adamsmithfans.com/files/2008/12/adam_smith3.jpg
As Adam Smith says, “It is not from the
benevolence of the butcher, the brewer, or the
baker, that we expect our dinner, but from their
regard of their own interest. We address
ourselves not to their humanity, but to their
self-love, and never talk to them of our own
necessities, but of their advantage.”
( Reilly 194)
Pair and Share: How does this show the
workings of the invisible hand? Think critically.
The Invisible Hand
“The (entrepreneur)…neither intends to promote the public interest, nor knows how much he is promoting it…He intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he is intending only his own gain, and he is in this…led by an invisible hand to promote an end which was no part of his intention….by pursuing his own interest he frequently promotes that of the society…” (Reilly 200)
Pair and Share: How does this show the workings of the invisible hand? Think critically.
The Invisible Hand:
The Price System
Izzit video
(5:00).
The Invisible Hand
The “market”
will provide
what society
needs
because of the
“self-interest”
(greed?) of
entrepreneurs
and
consumers.
http://romeconomics.com/wp-content/uploads/2013/01/Invisible-
Hand.jpg
Capitalism/The Free MarketLAISSEZ FAIRE CAPITALISM of the late19th/early 20th centuries:
the means of production are privately owned by business-people (entrepreneurs).
You need “natural laws” like supply and demand, freedom, and competition.
These incentivize innovation: to try new ideas or develop new products or services.
Supply and Demand is what gives products their value.
You need very little involvement of the government.
This is also called a free market.
http://rozdoum.com/blog_articles/items/ideal-client.html
Efficiency
Capitalism should be
efficient….how can the
product or service be
produced or offered most
efficiently?
This is to maximize profit.
How would you
organize the
boarding of an
airplane?HTTP://WWW.VOX.COM/2014/4/25/5647696/THE-
WAY-WE-BOARD-AIRPLANES-MAKES-
ABSOLUTELY-NO-SENSE
Natural Laws
Supply and Demand: The less of something and/or the
more people want it, the more valuable it is.
Freedom: People must be able to make choices.
Competition: Businesses must be free to enter and leave
the market for the market to work.
And, of course, scarcity.
Sourcing: APPARTS
Adam Smith: an excerpt from
“The Wealth of Nation” 1776
Fenton: pages 194-5
Identify: Author, Audience,
Main Idea, and Significance
Go into your notes/text and identify
one example of each of the following:
-Scarcity
-Economizing
-Incentives
-Opportunity Costs
-Mercantilism
-Means of Production
-Natural Laws:
-Competition
-Supply and Demand
-Freedom
-Capitalism’s “the Invisible Hand”.
Have students create
business plans…See
project instructions.
Show: Pennies a
Day
HOW CAPITALISM MAY BE ENDING POVERTY IN
OUR WORLD TODAY.
AS YOU WATCH THE FILM, LIST EXAMPLES OF
SCARCITY, SUPPLY AND DEMAND, COMPETITION,
FREEDOM, AND PROFIT.
Transition….
Capitalism: Focus on individual freedom and
scientific efficiency
Socialism and Communism: Focus on the masses
and equality
Socialism Socialism favors public
(government) ownership
over private ownership of
the means of production.
Society, not individuals,
should control the nation’s wealth.
Wealth should be more
equally distributed.
You can have elements of
a socialist economic
system and a democratic
political system.
http://www.marxists.org/history/usa/eam/spa/~SPA-SPAGLOBELOGO.gif
Communism/Marxism: At Least
in Theory
Karl Marx and
Frederick Engels
developed
communism in
1848 as workers’
lives changed in
the industrial
revolution.
http://www.york.ac.uk/depts/poli/images/Karl_Marx.jpg
Socialist Theory
Our labor is what makes us human. What we do makes us who we are.
Our labor is what give products their value.
https://pixabay.com/en/work-workers-men-face-silhouette-384745/
Capitalism, according to Marxists, would, by
its nature, lead to a communist revolution.
Laissez-faire or industrial
capitalism, according
to communism, exploits
(takes advantage of) workers.
The workers (proletariat)
will become educated
about this and start a
revolution against the
capitalists (bourgeoisie).
http://www.enargywebzine.eu/local/cache-vignettes/L250xH211/arton282-
16ce3.jpg
The Utopian Communist State
In theory…..
Ownership of the means of production would first be with the state and then with the workers in a democracy.
Classes would disappear. People would be less materialistic.
In reality…
All communist societies up to this point have been dictatorships.
http://filebox.vt.edu/users/efalwell/posters/1.jpg
Another transition…..MODIFIED CAPITALISM….LAISSEZ FAIRE WILL
CHANGE.
Modified Capitalism
The Federal Government (Fed) and local governments regulate aspects of the economy.
The Fed can use taxes and spending to influence the economy (Fiscal Policy).
The Fed can lower or raise interest rates to influence the economy (Monetary Policy).