Today’s Notes: Economic Systems

1. Today’s Notes: Economic Systems AWESOME IDEA FOR FRIDAY: Friday we’ll have our “quest” for our economics unit followed by a participation grade – a Pollyanna. We can’t do an auction b/c you can’t buy stuff in here with your $$....HOWEVER… we can definitely have fun with this! Supply & Demand Scarcity Wants & Needs Time Management Personal Preference Free-Market Systems “Chance” associated with the stock market …much more! What YOU need to do… Bring in an item between $1-5 for Friday. I’ll have a box in here if you want to do it ahead of time – make sure it’s labeled with your name (don’t write on the item). Participation grade! (don’t get something from lunch like a cookie or soda… do it right!)

2. Notes: Economic Systems Economic System: way in which a nation uses its resources to satisfy its people’s needs & wants

3. Oligopoly: A market structure where a few companies control the factors of production in an industry From last year, what is it called when one company controls the factors of production in an industry?

4. Recapping From 9th Grade… What is a bear market? What is a bull market? http://www.youtube.com/watch?v=1xAQLlvEIoQ

5. Bears & Bulls Bear Market: a general decline in the stock market over a period of time; A transition from high optimism to widespread pessimism. For both of these, think long term versus short term. Create a memory device & choose a way to remember these! You’ll see them again in college  Bull Market: when stock prices have increased for an extended period of time. If an investor is "bullish" they believe a particular company, industry, sector, or market in general is going to go up. So… you want to invest during a bear market because stock prices are lower & have the potential or expectancy to grow

6. Remember This Guy?... Make Sure You’re Clear: • The idea of “Laissez-Faire” is what Smith promoted… • The result was Capitalism: a market system where the means of production are privately owned

7. “In my book, The Wealth of Nations…. I talk all about how a more laissez-faire style of government would allow for the little man to improve his life via hard work. I propose a free market system – one that would shine a light on the motivations of private ownership with very limited governmental involvement” - Adam Smith In other words…. A. Smith

8. Recapping From 9th Grade… Free Market: goods & services are exchanged with little regulation So… what does this mean? Free Enterprise System: businesses are owned by private citizens who decide WHAT to produce, HOW MUCH to produce & what PRICES to charge. So… what does that mean? That’s what’s up! When you take notes… are you writing down what I have up here OR are you writing it down so that it makes sense to you NOW and LATER?... (which one should you probably do) 

9. The 3 Basic Economic Questions Every society (rich & poor) must answer 3 basic economic questions about the goods & services people want: 3. For whom will it be produced? 1. What will be produced? 2. How will it be produced?

10. What should be Produced? • If the gov’t decides to use resources to build new roads, fewer resources are available to maintain national parks • More police officers hired = fewer funds for teachers in the classroom • Automobile manufacturer needs to decide what kinds of vehicles to make/ how much of each

11. How should it be produced? • How many people to hire • Skilled ($$$) or unskilled ($) laborers • Will technology be used? • *What is the best combination of available inputs to get the job done for the lowest possible cost?

12. For whom should it be produced? • After goods/ services are produced, the type of economic system that people live in determines how things will be distributed • Who receives what? • Who gets the new/ old schools/ buildings? • In the U.S. distribution is based on a price system --- you get what you can afford/ pay for

13. BEHIND THE SWOOSH! http://www.youtube.com/watch?v=M5uYCWVfuPQ Raise your hand If you’re wearing Nike right now… If you own anything Nike?...