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Trade and economy

Trade and economy. Essential Questions - Trade. When and why did people start to barter? What are the problems with bartering? What is the difference between bartering and trade?. Background Information. Prior to written history – nomadic hunter and gatherers.

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Trade and economy

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  1. Trade and economy

  2. Essential Questions - Trade • When and why did people start to barter? • What are the problems with bartering? • What is the difference between bartering and trade?

  3. Background Information • Prior to written history – nomadic hunter and gatherers. • Followed animals migrations and vegetation cycles. • Neolithic Age • 8000 to 4000 BCE • Settled into communities (agrarian society) • Systemic agriculture • Domestication of animals

  4. Background Information (Con’t) • Places grew different crops, domesticated different animals. • What were the types of crops and animals impacted by? (Hint, it starts with a g.) • People began to barter for goods and services. • The first long-range trade routes first appeared around 3000 BCE. • Sumerians of Mesopotamia traded with the Harappans in the Indus Valley. • Silk Road

  5. Bartering • Barter: the direct exchange of goods/services without money.

  6. Why did People Barter? • To get what they need • Not able to grow or raise everything they need • Some people are better @ a task than others • Specialization: focusing on a specific task that an individual or company does best. • Tinsmith – farmer • Farmer – rancher • Are there problems with bartering?

  7. Problems with Bartering • Value of items are not standardized • Need someone to barter with • Growing seasons • Spoilage

  8. Trade • Trade: the exchange of goods, services, and money.

  9. Money • Cowrie Shells (China/South Africa) • Metal coins • Paper money • Representative money (backed by gold or silver reserves) • Fiat money (not backed by reserves)

  10. Economics

  11. Wants and Needs • Wants: goods/services that are not necessary but you desire or wish for. • Needs: goods/services that are required to survive such as food, clothing, shelter.

  12. Goods and Services • Goods: items that are bought/traded that you can feel…items that are tangible. • Service: any kind of work performed by others.

  13. Supply and Demand • Supply: how much of an item is available. • Demand: the desire to purchase a particular good or service. • Both supply and demand determine price.

  14. Opportunity Cost • Opportunity Cost: process of choosing one good or service over another. What you must give up to get something?

  15. Global Economy • Economy: activities related to the making, buying, and selling of goods or services. • Interdependence: when people depend on one another for goods and services. • Result of specialization.

  16. Types of Economy • Command-government controls all aspects • i.e. wages, working conditions, jobs for people, allocation of resources • Socialism-Europe • Free Market-individuals decide jobs, allocation of resources, products-U.S. • Private property a must • Democratic types of government

  17. Trade and Economy Impacts Civilizations • Rise of merchant class. • Who are merchants today? • Civilizations made money to support themselves. • How did they do this? • Civilization currency being used. • Led to exchange rates. • Exchanging of ideas. • Technological innovations-goods, protection.

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