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ECONOMICSPAGES 49-73
I. What is Economics?◦ 4 Economic Questions◦ Economic Terminology
II. Supply & Demand◦ Competition, Surplus & Scarcity◦ Law of Demand
III. Money◦ Bartering◦ Silver & Gold◦ Interest & Interest Rates
IV. World & U.S. Economy◦ Proprietorship, Partnership & Corporation◦ Stock Market◦ Tariffs & Trade Agreements
V. Louisiana Economy
Economics is the study of production, distribution and the consumption of goods and services.
What is Economics?
Goods and Services Good:
Service:
What is being produced or offered? How will it be produced or offered? How much should be produced or offered? Who will buy the product or service?
4 Questions of Economics
Market System: (Capitalist System) People are allowed to operate business with little government influence. Citizens answer the four questions of economics. Example: United States
Regulatory Agency: Command System:(Communist System)
A small group of government officials answer economic questions. Example: China and Cuba
Traditional System: Questions answered by tradition and custom. Example: African countries
Dividends:
Economic Terminology
Please Draw the Chart on Pg. 51 which shows Economic Flow.
Assignment
A market system is driven by supply and demand.
Demand – the desire, ability, & willingness to buy a product.
Supply and Demand:
The Law of Demand
Price
As price goes
down…
Demand
Quantity demanded goes
up…
Price
As price goes up…
Demand
Quantity demanded goes down…
Supply & Demand Curve
Why so many choices? Consumers want options.
Competition:
Which one do we choose? Marketing Advertising Other techniques
Competition:
What is a surplus? is an amount or quantity greater than what is needed.
What will happen to products if a surplus exists?
Scarcity exists when there is not enough of a product?◦ What happens to prices if scarcity exists?
Supply & Demand
Supply & Demand Curve
Supply & Demand also effects wages, salaries, and unemployment.◦ What is the difference between wages and
salaries?
Wage –
Salary -
Supply & Demand
During prehistoric times, people used the barter system to buy and sell goods. Native Americans used the barter system. Ex. Pg 56
People started using gold and silver because it was more convenient. The metals do not tarnish and are scarce. Eventually governments created coins.
Today money is backed by government with gold. Money without government backing has no value.
Money
Checks, debit cards and credit cards also allow people to purchase items.
Interest is charged when using credit cards. Banks also charge interest with loans.
There are two types of interest: simple & compound.
If you had a credit card, which kind of interest would you like not to have?
Money
Inflation occurs when demand for goods and services is greater than the supply.
Deflation occurs when there is a greater supply of goods and services than there is demand for them.
Money
Proprietorship – Owned by one person
Partnership – Two or more people
Corporation – Large business (Delta Airlines)
Tariff – A tax on foreign or imported goods
North America Free Trade Agreement (NAFTA)
(U.S., Mexico, and Canada – 1993)
U.S. and World Economies
Since beginning as a French colony LA’s economy was based on natural resources and farming.
When demand for LA’s resources strengthen so does the state’s economy.
Louisiana’s top resource is oil & natural gas.◦ 15% of oil in nation◦ Exxon refinery in Baton Rouge is largest in
western hemisphere
Louisiana’s Economy
Fishing is the state’s 2nd most important industry. Pg. 69
LA plays an important role in international trade due to location on the Mississippi River.◦ 25% of nations exports go through LA◦ New Orleans is the third busiest port in the world
Louisiana’s Economy
Hollywood South
Louisiana has become a popular place to film movies.
Big Momma’s House 2
The Dukes of Hazzard Interview with a
Vampire The Haunted Mansion Mortal Kombat The Waterboy Dead Man Walking Ray
Income Tax -
Property Tax -
User Fees -
Voters usually have the right to approve taxes.
Louisiana’s Economy
