latin american economics. what are production, distribution, and consumption? production-the process...
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Latin American Economics
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
What are the three basic economic questions?What to produce?How to produce?For whom to produce?
What are the four types of Economies?MarketCommandTraditionalMixed
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
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
The Economic Scale
Pure Market
Mixed Pure Command
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
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.
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?
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
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
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
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
Country Type of Economy
Growing or Struggling
What the government controls
Canada
Cuba
Brazil
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.
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.
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.
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
Physical Trade Barriers
Trade Helpers in Latin AmericaTrade Blockers in Latin America
Coast Panama CanalAmazon RiverAmazon rainforest
Amazon RainforestAndes MountainsSierra Madre
MountainsAtacama Desert
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
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
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
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?
GDPTotal goods and services
produced in a country.◦What would that include?
Like the country’s paycheck
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