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Bead Game Simulation

Bead Game Simulation. Reflection Questions. Which system had the most incentive to work? Why? Which system had the least incentive to work? Why? Which system was the most inefficient by modern standards? Explain. Which system would you like to live in, why?. Standards Mastery Sheet.

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Bead Game Simulation

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  1. Bead Game Simulation

  2. Reflection Questions • Which system had the most incentive to work? Why? • Which system had the least incentive to work? Why? • Which system was the most inefficient by modern standards? Explain. • Which system would you like to live in, why?

  3. Standards Mastery Sheet

  4. Economic System • Economic System – method used by society to allocate/distribute the scarce resources, in order to provide for the wants and needs of the people

  5. Three Economic Questions • What goods and services should be produced? • How should these goods and services be produced? • For Whomto produce them for?

  6. Four Economic Systems • Traditional economy – relies on habit, custom, or ritual to decided the 3 economic questions • Market economy – economic decisions are made by buyers and sellers trading freely. • Command Economies – in a centrally planned economy, the central government decides how to answer the three economic questions. • Mixed Economies – most modern economies are mixed economies, market-based economic systems in which government plays a role in the market.

  7. Daily Assignment Chapter 2 Section 1 – pgs. 23-27 • Bead Game Simulation

  8. Economic Freedom • Economic Freedom - freedom to make choices free of the government • Individual – where to work, study, consume • Business – what, where and how to produce

  9. Economic Efficiency • Economic Efficiency - making the most of scarce resources, using your resources wisely and productively • Technological innovations allow society to be more productive • Humans to robots

  10. Economic Security • Economic Security - government will provide a safety net in times of economic downturns • Social Security, welfare, unemployment checks, etc.

  11. Economic Predictability • Economic Predictability - knowing that goods and services will be consistently available • Gas, food, energy, etc.

  12. Economic Equity • Economic Equity - Fairness, being paid according to your skill level, not being discriminated against • Lebron James is higher paid than a teacher • A teacher is higher paid than a cashier at Wal-mart

  13. Economic Growth • Economic Growth – improving the economy from year to year, improving standard of living as measured by GDP. • Individual – better jobs, nicer homes, newer cars….better stuff! • Business – produce more, increase customers, open new factories, etc.

  14. Economic Innovation • Economic innovation – improving upon existing technology in order to improve efficiency. • Walkman to the iPhone, Record Player to Digital Media

  15. Additional Goals • Additional Goals – future goals for a society • Environmental protection, full employment, universal medical care, etc.

  16. Economic Goals and Societal Values Poster Project – pgs. 26-27 • Poster Requirements: • Title - Economic Goals and Societal Values • Summary Statement – “The Economic Goals and Societal Values provide a basic framework for each society and their attempts to provide for their people.” • Pictures of each goal represent each of the economic and social goals. • 1 if working alone • 2 if working with a partner • 3 if working with a group of 3 • Label, describe and summarize each picture • Economic Freedom • Economic Efficiency • Economic Security • Economic Predictability • Economic Equity • Economic Growth • Economic Innovation • Additional Goals Economic Efficiency Picture Summary: This picture represents assembly line production at an automobile manufacturing plant. This shows how the division of labor and specialization can increase efficiency.

  17. Economic Goals and Societal Values Economics Goals and Societal Values Poster Project pg. 23 - 27 Summary Statement: The Economic Goals and Societal Values provide a basicframework for each society and their attempts to provide for their people. Economic Predictability Economic Security Economic Efficiency Definition: picture represents an efficient use of resources through assembly line production Economic Innovation Economic Growth Additional Goals Economic Freedom Economic Equity • Poster Requirements: • Title - Economic Goals and Societal Values • Summary Statement – Purpose of economic and Societal Values • At least 8 pictures to represent each of the Economic Goals and Social Values • Label, definition and picture description for each of the 8 Economic Goals and Societal Values

  18. Review Economic Goals 1. Economic Freedom 2. Economic Security 3. Economic Innovation (Efficiency) 4. Economic Efficiency (Innovation) 5. Economic Growth (Innovation) 6. Economic Predictability 7. Additional (Future) Goals (Equity) 8. Economic Equity (Growth)

  19. Activator • Imagine that you are walking into Walmart. List 3 items that you could purchase and the departments that you would find them in.

  20. The Free Market • Market – buyers and sellers meet to exchange goods and services • Market Economy – economic decisions are made by consumers and businesses based on buying and selling of goods and services • All resources are privately owned • Any income derived from selling resources goes exclusively to the owner • The government has no role

  21. Role of the Consumer • Consumer Sovereignty - in a free market, consumers determine the goods that are produced; this makes them "sovereign" over production in an economy. • “Ruler” of the market; expressed through a dollar vote for products when we make purchases. “The customer is always right”. • When consumers buy products, their “dollar vote” signals to producers what to make and how much.

  22. Specialization • Specialization – the separation of tasks within a system; people focus on a specific purpose/task • Division of Labor – Workers perform fewer tasks in order to operate more efficiently

  23. Specialization • Specialization – the separation of tasks within a system; people focus on a specific purpose/task • Division of Labor – Workers perform fewer tasks in order to operate more efficiently

  24. Specialization Examples • Glynn Academy – teachers in different departments • Each teacher can master their content • Present it in the most efficient manner possible Social Studies Science English Math

  25. Specialization Examples Rancher Slaughter House Meat Cutter Final Good (Output) Consumer Good Publix Worker

  26. Specialization and Efficiency • Productivity – average amount of output (good or service) per unit of input (labor, machine, etc.) • Increased productivity means to do more with less • Capital investments allow increased efficiency

  27. Specialization and Efficiency • Productivity – average amount of output (good or service) per unit of input (labor, machine, etc.) • Increased productivity means to do more with less • Capital investments allow increased efficiency

  28. Productivity Mary looks over reports on four of her workers. Jack made 25 baskets in 5 hours. Walter made 36 baskets in 6 hours. Rudy made 40 baskets in 10 hours. Sam made 22 baskets in 4 hours. Jim made 50 baskets in 10 hours. Who has the greatest productivity? Jack 25/5 = 5 Baskets per hour Walter 36/6 = 6 Baskets per hour Rudy 40/10 = 4 Baskets per hour Sam 22/4 = 5.5 Baskets per hour Jim 50/10 = 5 Baskets per hour Walter has the greatest productivity

  29. Productivity Creates Wealth 3rd World Countries Developed Countries 29

  30. Households and Firms • Household – Person or group of people living in a residence • Consumers - use the finished goods and services (outputs) to satisfy wants and needs • Firm – business, organization that uses factors of production (inputs) to produce a product, which it then sells • Suppliers – transform “inputs” (F.O.P.) into “outputs” (products)

  31. Product Markets • Product Markets – Households and firms interact; producers sell their goods and services to consumers • Households are buyers of goods and services • Firms are sellers of goods and services (outputs)

  32. Factor Markets • Factor Markets – the markets where productive resources (F.O.P)/Inputs are bought and sold • Labor - Firms (businesses) hire workers and pay them salaries • Land - Purchased/rented land • Capital - Use money from households (savings, investment, etc) to purchase capital goods

  33. Circular Flow Model of Economic Activity – shows the flow of money and goods/services from and to businesses and households Consumer Spending Business Income/Revenue • Product Market • Market for Goods and Services • Firms sellHouseholds Buy Consumer Goods and Services Final Goods and Services Sold • Households • Buy and Consume • Goods and Services • Own and sell the F.O.P • Firms(Business) • Produce and sellGoods and Services • Hire and use F.O.P. Land, Labor, Capital - provided by household Inputs for Production (F.O.P.) • Factor MarketMarket for F.O.P • Households sell • Firms buy Income to Households/Individuals Payment for F.O.P. – Rent (Land) Wages (Labor), Interest (Capital), Profit (Entrepreneurs)

  34. Application Questions • In the factor market, what do businesses provide households? • The flow of goods and services in the product market is represented by which firm and products on the model below? • When you apply for a job at the local Starbucks which market are you in? • Which color arrows represent the flow of money; what color arrows represent the flow of inputs and outputs. Income/payment the F.O.P Starbucks/Coffee Factor Blue/Tan

  35. Daily Assignment - Circular Flow Model of Economic Activity Consumer Spending1. _________________________ • Business Income • _________________________ Product Market Goods Purchased 1. ______________________________ 2. _______________________________ Goods Offered1. ___________________________ 2. ___________________________ • Household • ________________________ FirmFirm 1. _____________________________ Firm 2. _____________________________ Input for Production 1. ___________________________ Factor of Production Offered1. ___________________________ Factor Market Weekly Income1. __________________ Payments for F.O.P 1. _________________

  36. Daily Assignment - Circular Flow Model of Economic Activity Consumer Spending1. _________________________ • Business Income • _________________________ Product Market Goods Purchased 1. ______________________________ 2. _______________________________ Goods Offered1. ___________________________ 2. ___________________________ • Household • ________________________ FirmFirm 1. _____________________________ Firm 2. _____________________________ Input for Production 1. ___________________________ Factor of Production Offered1. ___________________________ Factor Market Weekly Income1. __________________ Payments for F.O.P 1. _________________

  37. Circular Flow Model of Economic Activity Consumer Spending1. _________________________ • Business Income • _________________________ 9.49 9.49 Product Market Goods Purchased 1. ______________________________ Goods Offered1. ___________________________ 2. ___________________________ 3.___________________________ Tacos BurritosFajitas Fajitas • Household • ________________________ • ________________________ FirmFirm 1. _____________________________ Firm 2. _____________________________ Elisa Marcella Cilantros Books a Million Input for Production _________________________ _________________________ ________________________ Factor of Production Offered1. ___________________________ Stockers Coffee Sellers Cashiers Labor/Salesperson Factor Market Payments for F.O.P ________________ ________________ ________________ Weekly Income1. __________________ 200 3000- Lease 2200 – Electric 400 - Water

  38. Stossel - Rinkinomics

  39. American Free Enterprise Economic Freedom Competition Private Property Rights Self-Interest Voluntary Exchange Profit Motive Description Description Description Description Description Description Example Example 1. Example 1. Example 1. Example 1. Example 1.

  40. Economic Freedom • Description - Individuals’ right to choose your occupation and what to buy. • Firms’ right to hire or produce. • The right to conduct yourself with little government interference. • Examples: • 1. I had the freedom to become a teacher and a coach; I can buy whatever I want. • 2. Firms range from automakers to fast food.

  41. Voluntary Exchange • When individuals willingly engage in a transaction where both parties benefit. • Allows people to decide what and when they want to buy and sell, rather than forcing them to buy and sell at particular times or specific prices • Examples: • When I get a haircut, I get a fresh look, Sportsclips gets my money • When I buy gasoline, I get energy for my car, the firm gets my money

  42. Private Property Rights • Description – Individuals and businesses have the right to buy and sell as much property as they want • Property owners can prohibit others from using their property • The fifth amendment protects us from the federal or state governments taking our property for their own use. • Examples: • Households and firms are encouraged to own property and enjoy the protection of the property • Firms can own and operate their business with limited interference from the government

  43. Profit Motive • The force that encourages people and organizations to improve their material well-being • Examples • Many people in our society are driven by the desire to make money, which ultimately benefits the market • People in the U.S. are rewarded for innovations and efficiency via cash incentives

  44. Competition • Competition – efforts among sellers/producers to attract consumers at various prices • At the heart of market economic philosophy • Examples: • Mcdonalds vs. Burger King • Walmart vs. Target

  45. Circular Flow Model of a Mixed Economy Consumer Spending/Investing Business Income/Revenue Product Market Goods and Services Sold Taxes Goods and Services Purchased: Taxes Households Expenditures Expenditures • Firms Land, Labor, Capital, Entrepreneur Inputs for Production (F.O.P.) Taxes Taxes Factor Market Income to Households/Individuals Payment for F.O.P. – Wages, rent, capital goods

  46. Role of the Government in a Market Economy • Government acts an informer, protector, provider, and regulator • Government has the responsibility to protect property rights, contracts and other business activities

  47. Role of the Government in a Market Economy • Government has the responsibility to protect property rights, honor contracts, protect against discrimination, monopolies or unfair business practices

  48. Role of the Government as Informer • Role of the Government as Informer: • Make sure that producers provide consumers with accurate information • Consumers use govt. info. to protect themselves from dangerous products and fraudulent claims.

  49. Role of Government as Regulator • Role of government as a protector: • Federal government acts to preserve competition, regulates airlines, communications, banking, etc. • Though they do not control it, they impose various restrictions on the private market • Gas stations, must dispose of used motor oil properly • Zoning laws, prevent homeowners from running businesses out of their homes

  50. Negative Effects of Regulation • Government regulation can have negative effects on businesses and consumers • Negative effects: • Government rules can increase the cost of business • Stifled competition can lead to high prices • Increase of governmental spending can lead to higher taxes

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