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Latin American Economics

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Page 1: Latin American Economics. What are Production, Distribution, and Consumption? Production-the process of making a product ◦ List two examples: Toys, Games,

Latin American Economics

Page 2: Latin American Economics. What are Production, Distribution, and Consumption? Production-the process of making a product ◦ List two examples: Toys, Games,

What are Production, Distribution, and Consumption?

Production-the process of making a product◦List two examples: Toys, Games, cars,

FruitDistribution- who gets the product

and how does it get to them◦List two examples: trade, delivery, store,

online, mailConsumption- what is done with the

product◦List two examples: play it, drive it, eat it

Page 3: Latin American Economics. What are Production, Distribution, and Consumption? Production-the process of making a product ◦ List two examples: Toys, Games,

What are the three basic economic questions?What to produce?How to produce?For whom to produce?

Page 4: Latin American Economics. What are Production, Distribution, and Consumption? Production-the process of making a product ◦ List two examples: Toys, Games,

What are the four types of Economies?MarketCommandTraditionalMixed

Page 5: Latin American Economics. What are Production, Distribution, and Consumption? Production-the process of making a product ◦ List two examples: Toys, Games,

How does a command economy answer the questions?

What to produce?◦The government decides what is needed

by their citizensHow to produce?

◦The government decides how things will be produced, who will make the products and how much money they will earn

For whom to produce?◦The government will decide how much of

the product the citizens get and how much it will cost

Page 6: Latin American Economics. What are Production, Distribution, and Consumption? Production-the process of making a product ◦ List two examples: Toys, Games,

How does a market economy answer these questions?

What to produce?◦Entrepreneurs create new products and

servicesHow to produce?

◦Business owners decide how much of the product is made and how much they will pay their employees

For whom to produce?◦Business owners will advertise their

product and set the price at what they believe people are willing to pay

Page 7: Latin American Economics. What are Production, Distribution, and Consumption? Production-the process of making a product ◦ List two examples: Toys, Games,

The Economic Scale

Pure Market

Mixed Pure Command

Page 8: Latin American Economics. What are Production, Distribution, and Consumption? Production-the process of making a product ◦ List two examples: Toys, Games,

How does a traditional economy answer these questions?

What to produce?◦Community, tribe, family, location,

traditions and customsHow to produce?

◦Climate, community, tribeFor whom to produce?

◦The community shares

Page 9: Latin American Economics. What are Production, Distribution, and Consumption? Production-the process of making a product ◦ List two examples: Toys, Games,

Government of Latin America Quiz

1. Brazil’s government leader is an elected President.

2. Mexico has a Prime Minister.3. Cuba’s leadership is autocratic.4. In Latin America no one is forced to vote by law.5. Citizens have freedom of speech in Mexico and

Brazil.6. There are many political parties in Cuba.7. You can speak out against the government in

Cuba.8. Brazil’s government is very similar to the U.S.’s.9. Mexico has a federal government.10. Cuba has a presidential system.

Page 10: Latin American Economics. What are Production, Distribution, and Consumption? Production-the process of making a product ◦ List two examples: Toys, Games,

Enrichment1. Which economic system do you think

consumers would like the most?2. Which economic system would be the

worst for competition between producers?

3. A market economy has ___ ownership of property and resources? (private, government, or tribal)

4. Which economic system is found in agricultural societies?

5. Which is the most common economic system today?

Page 11: Latin American Economics. What are Production, Distribution, and Consumption? Production-the process of making a product ◦ List two examples: Toys, Games,

Economy What to produce

How goods are produced

How people get products

Traditional Climate, traditions, culture, location

farming, hunting

Trade, sharing

Command the government

government owned factories and farms

government distributes products

Market Buyers and sellers

Private citizens, factories, technology

Store, samples, mail, ebay, craig’s list

Page 12: Latin American Economics. What are Production, Distribution, and Consumption? Production-the process of making a product ◦ List two examples: Toys, Games,

New vocabularyDemand- what the buyers desireSupply- goods made by the

sellersWage- money paid for workNationalized- business owned by

the governmentPrivate-owned- business owned

the citizens

Page 13: Latin American Economics. What are Production, Distribution, and Consumption? Production-the process of making a product ◦ List two examples: Toys, Games,

What are the differences?

Pure Market Pure Command

Citizens can own businesses

Buyers and sellers decide how many goods are produced

Buyers and sellers decide how much they cost

Governments own businesses

Government decides how many goods are produced

Government decides how much things cost

Page 14: Latin American Economics. What are Production, Distribution, and Consumption? Production-the process of making a product ◦ List two examples: Toys, Games,

What are the differences?

Pure Market Pure Command

Supply and Demand determines prices

Privately own business

Wages determined by employer

Demand determines supply

Government price control

Nationalized businesses

Wage controlGovernment controls

supply

Page 15: Latin American Economics. What are Production, Distribution, and Consumption? Production-the process of making a product ◦ List two examples: Toys, Games,

Country Type of Economy

Growing or Struggling

What the government controls

Canada

Cuba

Brazil

Page 16: Latin American Economics. What are Production, Distribution, and Consumption? Production-the process of making a product ◦ List two examples: Toys, Games,

Canada

Canada has a mixed market economy. Since WWII, Canada has progressed from a rural economy to a thriving industrial one based on manufacturing, mining and service industries. The government controls some areas like healthcare and postal service.

Page 17: Latin American Economics. What are Production, Distribution, and Consumption? Production-the process of making a product ◦ List two examples: Toys, Games,

Cuba

Cuba has a command economy. The government owns all resources and property, and decides what and how much are to be produced. Cuba’s economy has struggled since the breakup of the Soviet Union in the early 1990s because the Soviet Union was Cuba’s main trading partner.

Page 18: Latin American Economics. What are Production, Distribution, and Consumption? Production-the process of making a product ◦ List two examples: Toys, Games,

Brazil

Brazil has a mixed market economy, with strong agricultural, mining, manufacturing, and service segments. Brazil has the strongest economy of all the South American countries. The government controls some area like health care and the postal service.

Page 19: Latin American Economics. What are Production, Distribution, and Consumption? Production-the process of making a product ◦ List two examples: Toys, Games,

Trade barriersWhat are the two kinds of trade

barriers?◦Physical

Examples: Mountains, forests, deserts, climate

◦Political Examples: embargo, tariff, currency

exchange, import quota, trade agreement between countries

Page 20: Latin American Economics. What are Production, Distribution, and Consumption? Production-the process of making a product ◦ List two examples: Toys, Games,

Physical Trade Barriers

Trade Helpers in Latin AmericaTrade Blockers in Latin America

Coast Panama CanalAmazon RiverAmazon rainforest

Amazon RainforestAndes MountainsSierra Madre

MountainsAtacama Desert

Page 21: Latin American Economics. What are Production, Distribution, and Consumption? Production-the process of making a product ◦ List two examples: Toys, Games,

Political Trade Barriers

Definitions Why would a country use this?

Embargo- a ban on tradeTariff-a tax on imports Import Quota- a limit on

importsCurrency Exchange-

different money in countries

Trade agreement- an agreement concerning trade between two or more countries

Disagree with a country

to protect your country’s products

Different currencies are worth different values

To get things that your country needs

Page 22: Latin American Economics. What are Production, Distribution, and Consumption? Production-the process of making a product ◦ List two examples: Toys, Games,

Political Trade BarriersEmbargo- a ban on tradeTariff-a tax on importsImport Quota- a limit on importsCurrency Exchange- different

money in countriesTrade agreement- an agreement

concerning trade between two or more countries

Page 23: Latin American Economics. What are Production, Distribution, and Consumption? Production-the process of making a product ◦ List two examples: Toys, Games,

North America Free Trade AgreementUnited States, Mexico, CanadaRemoves trade Barriers such as

Tariffs, embargos, import quotasSigned in 1993To get items that you do not haveSpecialization-when a country

focuses on producing a certain product

Venezuela-oilCuba-Sugar

Page 24: Latin American Economics. What are Production, Distribution, and Consumption? Production-the process of making a product ◦ List two examples: Toys, Games,

Warm-up

1. Why would a country use an embargo instead of a tariff?

2. What is the main difference between a quota and a tariff?

3. If a country wants to increase its number of imports would it use a quota?

Page 25: Latin American Economics. What are Production, Distribution, and Consumption? Production-the process of making a product ◦ List two examples: Toys, Games,

GDPTotal goods and services

produced in a country.◦What would that include?

Like the country’s paycheck

Page 26: Latin American Economics. What are Production, Distribution, and Consumption? Production-the process of making a product ◦ List two examples: Toys, Games,

What are the four factors that impact economic growth?

Factors HOW???

Entrepreneurs- one that starts a new business

Capital goods- factories, machinery, tools, computers, things needed to produce products

Human Capital- workers

Natural Resources- things found in nature

They make the country money

They are needed to make products

Healthy, educated workers

Use them make products and sell them to other countries