SS9 ECONOMICS 101 – The Short Version

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SS9 ECONOMICS 101 – The Short Version. Meet the Normal Family:. I need new pom-poms!. I want a new snowboard!. Don’t these kids know that money doesn’t grow on trees?!. This family has an ECONOMIC PROBLEM !. WHY?. Student Notes…Pay Attention!. - PowerPoint PPT Presentation

Text of SS9 ECONOMICS 101 – The Short Version

SS9 ECONOMICS 101 The Short Version

SS9 ECONOMICS 101 The Short Version

Student NotesPay Attention!

This family has anECONOMIC PROBLEM!WHY?

I need new pom-poms!

I want a new snowboard!

Dont these kids know that money doesnt grow on trees?!

Meet the NormalFamily:Because WANTS are UNLIMITED and RESOURCES are LIMITED!

3 Types of ResourcesNATURAL RESOURCES: soil, fish, minerals, etc.

HUMAN RESOURCES: people and their skills and knowledge

CAPITAL RESOURCES: money or anything that can be used as collateral to get money (property, rare metals, etc.)RESOURCES are known as FACTORS OF PRODUCTION (FOP) in ECONOMICS(meaning you need all three in order to produce goods and services)

NATURAL RESOURCES = LAND

HUMAN RESOURCES = LABOUR

CAPITAL RESOURCES = CAPITAL

LAND + LABOUR + CAPITAL = FOP

A LIMITED SUPPLY of any RESOURCE (or FOP) is called SCARCITY.EVERY society deals with SCARCITY. The way a society deals with scarcity defines its ECONOMIC SYSTEM.

Other Words for Scarcity?ShortageDeficitShortfallDecreased AmountRareFewLimited

The 3 Basic Economic Questions (3BEQs)(how a society attempts to deal with scarcity)

What is needed or wanted?

How will it be produced?

Who will get it?

How these questions are answered determines a countrys economic system. Sometimes the government makes the decisions, sometimes it doesnt. For example:

The Economic Continuum LeftCenterRightCommunist

Centrally Planned

Totalitarian

PlannedSocialist

Mixed

Modified MarketCapitalist

Market

Free Enterprise

Laissez Faire

Left (Planned)govt answers 3BEQsgovt owns and manages FOPgovt plans what will be producedgovt decides how to use resourcesindividuals have little influence on govt decisionsconsumers have no say in economy

Centre (Mixed)combines private ownership and govt control to answer 3BEQsprivate businesses own and manages some FOPgovt owns and manages some FOP (CROWN CORPORATIONS)govt control of economy varies depending on who is in powerconsumers have some say in economy

Right (Market)private business and consumers answer 3BEQprivate businesses own and manage FOPconsumers determine what is needed or wantedproducers meet consumer demandbusiness succeeds if they produce what consumers wantno govt involvement in business

ECONOMIC SYSTEMS can SHIFT LEFT or SHIFT RIGHT depending on social and political factors affecting the economy, such as VALUES, STANDARD OF LIVING and QUALITY OF LIFE.

What do Economic Systems Value?The PUBLIC GOOD is about whats BEST for society as a WHOLE. Governments differ on how to achieve it.COOPERATION: set aside individual interests to meet the needs of the group; recognizes needs and circumstances; values EQUITY INDIVIDUALISM: whats best for individuals will add up to whats best for society; values creativity and INDEPENDENCE.

There are extremes at either end of the continuum. Can you think of some examples of other countries we can place on the continuum?

Shanghai ChinaMexicoRussiaBritainNorth Korea

LETS COMPARE:

CANADAS ECONOMYPeace, order, and good government

reflects idea of cooperationgovt makes economic decisions on behalf of citizensMIXED because citizens, business and govt make economic decisionsGovt operates Crown Corporations when it is in the public interest to do so because: its too expensive for private business to operate, or, the population is too small for the business to be profitable for an individual or company

LETS COMPARE: cont.USAS ECONOMYlife, liberty, and the pursuit of happinessspirit of individualism based on history of independencevalues individual economic decision-making; govt does not like to intervenemarket forces determine economyworks through forces of competition and the idea of supply and demandfederal govt only controls necessary services (some social supports, postal service, some healthcare

CANADAS ECONOMYPeace, order, and good governmentSHIFT LEFTuniversal healthcareCanada Pension Plan for seniorsestablish Crown Corporations Air Canada, CBC, Via Rail, Canada Post, AGT

CANADAS ECONOMYPeace, order, and good governmentSHIFT RIGHTcuts in govt spendingprivatize crown corporations (Air Canada, Via Rail, AGT=Telus)NAFTA increases influence of market in economy

USAS ECONOMYlife, liberty, and the pursuit of happiness

SHIFT LEFTOld Age Security for seniorsFarm support (subsidies)Public works projects (roads, dams, bridges)USPS

SHIFT RIGHTreduced govt spendingreduced regulations/rules on trade

USAS ECONOMYlife, liberty, and the pursuit of happinessWhat are some of the things people living in either country might value in terms of STANDARD OF LIVING and QUALITY OF LIFE? Lets make a comparison:

What could be considered NEEDS? WANTS? Coming up next:

What is the relationship between SCARCITY and SUPPLY and DEMAND?What role does COMPETITION play in an economic system? What is the relationship between SCARCITY and COMPETITION?