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