unit 1 & 2: foundations in economics/ macroeconomics

Unit 1 & 2:Unit 1 & 2:Foundations in Foundations in

Economics/Economics/Macroeconomics Macroeconomics

Unit 1 & 2:Unit 1 & 2:Foundations in Foundations in

Economics/Economics/Macroeconomics Macroeconomics

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Getting Getting StartedStarted

Economic Economic SystemsSystems

Supply and Supply and DemandDemand

Its Human Its Human NatureNature

SurplusSurplus

final

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The resources used to make goods and The resources used to make goods and services are called this services are called this

$100 $100 Getting StartedGetting Started What are factors of productionWhat are factors of production Land Land Labor Labor CapitalCapital

$200 $200 Getting StartedGetting Started Oil, engineers, and drillsOil, engineers, and drills Income, workers, & moneyIncome, workers, & money

OrOr Farmers, importers and exportersFarmers, importers and exporters

Which of the above sets Which of the above sets include the 3 factors of include the 3 factors of production?production?

$200 $200 Getting StartedGetting Started What is oil (land)What is oil (land) Engineers (labor)Engineers (labor) and Drills (capital)and Drills (capital)

$300 $300 Getting StartedGetting Started

Resources in any society are Resources in any society are scarce so a society must make this scarce so a society must make this decision first…decision first…

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What is make choices how to use their What is make choices how to use their resourcesresources

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1.1. The amount of money they haveThe amount of money they have

2.2. The quality and quantity of land, labor, The quality and quantity of land, labor, and capital resourcesand capital resources

oror

3.3. Exchange rates of currency Exchange rates of currency

Which of the above limits an economy’s Which of the above limits an economy’s potential output?potential output?

$400 $400 Getting StartedGetting Started

What is the quality and quantity of What is the quality and quantity of land, labor, and capital resourcesland, labor, and capital resources

$500 $500 Getting StartedGetting Started

The price of burgers doubled and The price of burgers doubled and the price of tacos stayed the same, the price of tacos stayed the same, how would people respond?how would people respond?

$500 $500 Getting StartedGetting Started What is buy more tacos and less What is buy more tacos and less

burger?burger?

$100 $100 Economic SystemsEconomic Systems An advantage of this type of market An advantage of this type of market

system is that it offers the greatest system is that it offers the greatest variety of goods and services to the variety of goods and services to the consumer consumer

$100 $100 Economic SystemsEconomic SystemsWhat is a FREE market What is a FREE market systemsystem

$200 $200 Economic SystemsEconomic Systems

The Unites States economy is The Unites States economy is best described as thisbest described as this

$200 $200 Economic SystemsEconomic Systems

What is a Mixed MarketWhat is a Mixed Market

$300 $300 Economic SystemsEconomic SystemsIn economics, this term refers to In economics, this term refers to

when assets owned by the when assets owned by the governments are sold to governments are sold to individuals or businessindividuals or business

$300 $300 Economic SystemsEconomic Systems What is “Privatization”What is “Privatization”

$400 $400 Economic Systems Economic Systems In a market economy, people act in In a market economy, people act in

self interest depending on the self interest depending on the individuals particular wants…this individuals particular wants…this helps public interest because it does helps public interest because it does this to the markets this to the markets

$400 $400 Economic SystemsEconomic Systems

What is make them competitive What is make them competitive with a variety of productwith a variety of product

$500 $500 Economic Systems Economic Systems In this kind of market system the In this kind of market system the

Government decides how to allocate Government decides how to allocate resourcesresources

$500 $500 Economic Systems Economic Systems What is a Command system What is a Command system (Centrally planned)(Centrally planned)

$100 Supply and Demand$100 Supply and Demand

The price of products in a The price of products in a competitive market are competitive market are determined by these two determined by these two factors factors

$100 Supply and Demand$100 Supply and Demand

What is Supply and What is Supply and DemandDemand

$200 Supply and Demand$200 Supply and Demand

As the price of an item As the price of an item increases, what happens to increases, what happens to the quantity demanded?the quantity demanded?

$200 Supply and Demand$200 Supply and Demand

What is demand decreasesWhat is demand decreases

$300Supply and Demand$300Supply and Demand

The quantity of a good or The quantity of a good or service a producer is service a producer is willing and able to produce willing and able to produce at different possible pricesat different possible prices

$300 $300 Chart ToppersChart Toppers What is SupplyWhat is Supply

$400 Supply and Demand$400 Supply and Demand What has What has

occurred to occurred to market price market price and quantity and quantity

in the graph?in the graph?

0QQ0 Q1

P1

P0

D1

D0

Ps

D0-Original Demand D1-New Demand

$400 Supply and Demand$400 Supply and Demand

Price increased and Price increased and quantity increasedquantity increased

DAILY DAILY DOUBLEDOUBLE

$500 Supply and Demand$500 Supply and Demand

If demand for MKS Studios music recording If demand for MKS Studios music recording time increases, what impact will this have on time increases, what impact will this have on wages and number of workers employed at wages and number of workers employed at MKS Studios?MKS Studios?

$500 Supply and Demand$500 Supply and Demand

What is an increase in wages and What is an increase in wages and number of employednumber of employed

$100 $100 It’s Human NatureIt’s Human Nature

This is how consumers make their This is how consumers make their desires known to the government…desires known to the government…

And this is how they make their And this is how they make their desires known to businessesdesires known to businesses

(2 part answer)(2 part answer)

$100 $100 It’s Human Nature It’s Human Nature What is by voting and buyingWhat is by voting and buying

$200 $200 It’s Human Nature It’s Human Nature

The economic system where people The economic system where people trade for the goods they need or want trade for the goods they need or want

is called thisis called this

$200 $200 It’s Human NatureIt’s Human Nature

What is a Free Market systemWhat is a Free Market system

$300 $300 It’s Human NatureIt’s Human Nature Entrepreneurs take the risk of Entrepreneurs take the risk of

ownership in the pursuit of thisownership in the pursuit of this

$300 $300 It’s Human NatureIt’s Human Nature What is Profits ($$$)What is Profits ($$$)

$400 $400 It’s Human Nature It’s Human Nature

Where are consumers most likely going to Where are consumers most likely going to spend their money?spend their money?

$400 $400 It’s Human NatureIt’s Human Nature

What is to satisfy specific needs and What is to satisfy specific needs and wantswants

$500 $500 It’s Human NatureIt’s Human NatureYou Buy a 50 inch Plasma HDTVYou Buy a 50 inch Plasma HDTV

What is your What is your OPPORTUNITY COSTOPPORTUNITY COST

$500 $500 It’s Human Nature It’s Human Nature

What is other goods and What is other goods and services given up to buy the services given up to buy the

TVTV

$100 $100 SurplusSurplusIn the United States these 3 groups decide In the United States these 3 groups decide

what goods and services should be what goods and services should be producedproduced

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Producers, Consumers and Government Producers, Consumers and Government

$200 $200 SurplusSurplus

When people’s wants and needs exceed When people’s wants and needs exceed the resources available you get thisthe resources available you get this

$200 $200 SurplusSurplusWhat is scarcityWhat is scarcity

$300 $300 SurplusSurplus

This is what you call a person who starts a This is what you call a person who starts a businessbusiness

$300 $300 SurplusSurplus

What is an entrepreneur What is an entrepreneur

$400 $400 SurplusSurplus Benefits to older citizens, Benefits to older citizens,

surviving family members, and surviving family members, and people with certain disabilities people with certain disabilities are provided by this are provided by this government agencygovernment agency

$400 $400 Surplus grab Surplus grab

What is Social SecurityWhat is Social Security

DAILY DAILY DOUBLEDOUBLE

$500 $500 Surplus Surplus

In the market for CD’s, what will In the market for CD’s, what will happen to price and quantity if both of happen to price and quantity if both of the following occur? the following occur?

Large numbers of individuals download music illegally. Large numbers of individuals download music illegally. Technological advances reduce the cost of producing a Technological advances reduce the cost of producing a

music CD.music CD.

$500 $500 Surplus Surplus

What is price decreases and quantity What is price decreases and quantity decreases?decreases?

CompetitionCompetition

Safeway recently found itself Safeway recently found itself in competition with a newly in competition with a newly built Walmart Super Center. built Walmart Super Center.

The new competition will The new competition will most likely result in Safeway most likely result in Safeway

offeringoffering(Price and (Price and Quality)Quality)

Lower prices and higher Lower prices and higher qualityquality