Chapter 6 To what Extent do Different Economic Systems Affect

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Chapter 6 To what Extent do Different Economic Systems Affect Powered By Docstoc
					Definitions work sheet
   You are in charge of all the money coming into
    your home every month
   What factors would you have to consider in
    deciding how to spend that money?
   Everybody in you house will have different
    ideas on what's important and what it should
    be spent on
       That’s economics
   We will looking at the economic systems of
    Canada and its largest trading partner, the
    United States
   What values shape these systems, how they are
    different, and how they are the same
   Cartoon, pg 199
   Why didn’t the manufacturer make more
   Why did the truckers go on strike?
   Why did the store decide to sell the game for
   Why would anyone buy it for $99.99?
   The demand for super cyborg city was so great
    it created a scarcity of the product
       To many people wanted the product, and not enough
        copies were available
   Some things people need are unlimited- ex air
   Most things that people need or want are
    limited. This is because resources are limited
   In economics resources include, money, labour,
    and materials
   Land
       Materials found in the natural environment needed
        to produce goods and services, such as renewable
        and non-renewable resources
         What impacts might this decision about using the land
         have on the land?
   Labour
       Labour consists of the physical and mental effort
        needed to produce goods and services
         Construction workers building a house- if there aren’t
         enough workers , fewer houses get built

How do choices
concerning jobs effect the
work force?
   Capital
     Consists of money that people own or borrow, used to
      purchase equipment, tools, and other resources needed
      to produce goods and services
     Ex- setting up a plane production plant requires money

What if the capital that
built this airplane were
invested in something
else? How might this
impact airports and air
   Get into 4 teams
   Each team will choose whether they would
    prefer to live in a jungle or a zoo. Make sure
    you write your decision at the top of the page.
   Answer the questions from that perspective.
   Who would rather live in a jungle? Who would choose
    the zoo? Explain your answers.
   What are the most important reasons for your personal
    choices? What values or beliefs emerge in these
   Can you think of countries that could be compared to
    jungles or zoos?
      What does the country you have chosen have in
    common with the jungle or zoo?
      Speculate on:
      – the living conditions
      – the type of government
      – the economic activities
      – the individual happiness and collective well-being.
    What are the drawbacks to living in the environment
    you initially chose?
   An economic system is a way to solve the basic
    problem of scarcity.
   Economic systems can be placed on a
    spectrum; their spot on that spectrum depends
    on the underlying values of that society
More government control   Less government control
   At this end of the spectrum, the government
    makes all the decisions about how to solve
   The Government owns and manages all the
    resources needed to produce things
       Resources are publicly owned
       Government makes all decisions about resources
       Individual consumers have little influence on
        decision making
       Ex. Former USSR
   On this end of the spectrum, the choices of
    individuals solve scarcity
   Private businesses manage and sell their own
   Businesses succeed if they sell products
    consumers want, otherwise they fail
   The government does not get involved
   Ex. The United States
   Combines private ownership and government
   Individuals and government make decisions
    about what to produce
   The level of government involvement depends on
    what political party is in power
       Liberal Party-More involvement
       Conservative Party-Less involvement
   Ex- Canada, Sweden
   The Canadian and American economic systems
    are very similar, but they developed from
    different starting points
       Their starting points involved different answers to
        the fundamental question “what’s the best way to
        achieve the public good?”
   The Public Good and Cooperation
       The belief that individuals must consider each other
        and set aside their individual differences to achieve
        what’s best for society
         What style of economic system do you think this idea
   The Public Good and individualism
       the belief that what's best for each person individually
        adds up to what best for society
         What style of economic system do you think this idea
   Canadian Economy pg 206-207
   How might the history of Canada shape the
    value and attitudes in Canada?
   The U.S. Economy pg 208
   How might the history of the U.S. shape the
    values and attitudes in the U.S.?
   Video- VHS Capitalism vs. communism
   Public Good Worksheets
   Supply and demand control the market system
    through a cause-and-effect relationship related
    to price.
   Supply and demand effect quality of life
    because they affect the prices of products we
    buy, the availability of products, and jobs
    connected to creating products.
       Supply and Demand Activity
   Demand is the quantity of a good that consumers
    will buy. The demand for the good is related to
    the price of that good.

   Generally, the higher the price of a good, the less
    people will want to buy and therefore, the lower
    the demand. When something is expensive,
    people will purchase less of it or a substitute.

   The opposite is also true: the lower the price of a
    good, the more people will want to buy and the
    higher the demand will be. When something is
    cheap, people will want to buy more of it.
   Supply is the quantity of a good that producers
    are willing to make and offer for sale in the
    market. The supply of a good is related to the
    price of that good.

   Generally, the higher the price of the good, the
    more producers will want to make and the
    greater the supply.

   The opposite is also true: the lower the price of
    a good, the less producers will want to make
    and the lower the supply will be.
   Competition is about striving to get consumers
    to buy their products
   Producers attract consumers in a variety of
    ways-price, product quality, and advertising
   Many factors can affect competition, including
    the value of consumers and decisions by the
    government to get involved in decisions about
    supply and demand
       Ex: coke vs. Pepsi, ford vs. GMC, Nike, vs. Adidas
       2 Donut shops case study- pg 212
   Prices in a free market system are
    determined by the interaction of supply
    and demand.
   The price of a
    good will naturally
    move to a level
    where the quantity
    demanded is
    EQUAL to the
    quantity supplied.
    At this point, the
    market is said to
    be at EQUILIBRIUM.
   In a free market system, the equilibrium
    price and quantity of most goods are
    constantly changing as the market adjusts
    automatically to changes in the level of
    supply and demand.

   Lemonade
   Firms are encouraged to increase
    production of those goods that are in high
    demand and to reduce production of less
    popular goods
   Goods are made available to consumers
    at the lowest possible price
       Ford Motor company grew because of their
        ability to supply cars to the consumers for a
        lower price due to the invention of the assembly
   Market economies rely on the decisions of
    individuals consumers and producers
   Sometimes the government may get involved
    to inform, protect or ensure good and fair
       Ex. The B.C. government started its own auto
        insurance program because it believed private
        insurance companies were to expensive
   Can you think of any other reasons why the
    government may get involved?
   The free market economy does not grow at a
    constant rate. Instead, it goes through a
    continuing series of “boom” and “bust”
    periods called the business cycle.
   period of prosperity and economic growth
   high level of employment
   wages and profits rise, therefore spending
   GDP (gross domestic product) is high
   Problem: INFLATION
   Economic decline and crisis
   production decreases, therefore unemployment
    rises and wages fall
   consumers restrict spending, therefore prices
    and profits drop
   RECESSION – mild and short lived downturn
   DEPRESSION – longer and severe period of
   Governments intervene in the economy by
    changing their level of spending and the
    supply of money to try to even out the boom
    and bust cycles
   Look at the examples on pg 214 and 215
   To what extent do you agree or disagree with
    the involvement of the government in each
   Entrepreneur – a person who ORGANIZES a
    business and takes the RISKS associated with
    competing in a market economy
       They are the heart of the market system

   The following are clips from CBC television’s
    reality show Dragon’s Den:
       Dragon's Den
       Dragon's Den 2
   Read the case studies on Page 226 and 229 and
    answer the questions
   Break into 3 groups
       1) Supply
       2) Demand
       3) Price

   I will read some “what if “ Statements. You as
    a group must decide what will happen
     Will the supply/demand/price go up?
     Will the supply/demand/price go down?

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